Pinduoduo’s IPO Takes China Back 20 Years

China was flush with fake products in the 1980s and 1990s. Famous cases include a major counterfeit drug scandal and the infamously poor quality of leather shoes made in Wenzhou that often lasted only a day. In those decades, the reputation of Chinese product quality plummeted abroad. Fake goods coming out of China negatively affected exports and foreign relations.

The pervasiveness of the counterfeit business propelled the government to form and support consumer protection bodies and anti-piracy regulations. The annual Consumer Rights Day Gala on March 15th – a two-hour television program that first aired in 1991 – aimed to protect consumer rights by identifying and shaming companies that produced fake or poor-quality goods. However, the once hugely popular show has become less relevant; China’s capacity for innovation has grown and the number of counterfeit scandals has decreased. All these developments have led many to believe that the situation...