Counterfitting is a big problem when it comes to something high end that can be turned into a commodity. I know we often talk at work (I'm at a publishing company) about expanding new markets, and everyone brings up how we can increase sales in China. The answer is we probably can't, because as soon as we print a book, often times it is sent out counterfitted for much much less than we could every get for it. And from the story about the factory making the fakes, I might guess that people from the original AG factory over there left and set up shop to do the counterfitting. It's not some seedy back alley there. The problem is the government in China does not enforce worldwide trademarks and copyrights, allowing this to go on.