China smashes counterfeit hard drive ring

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SHANGHAI (Reuters) – Chinese police have seized more than 210,000 hard drives produced by a counterfeit ring that sold them as brand-name items from the likes of Hewlett Packard Enterprise and IBM, the Xinhua news agency reported on Saturday.

China has vowed to get tough on counterfeiting and intellectual property theft but many brands still face the problem with a broad range of items from cosmetics to vehicles being copied.

The theft of intellectual property is a major source of friction in a trade dispute with the United States.

Police arrested 56 suspects at two factories and four offices in the cities of Nanjing, Beijing, Chongqing and Guangzhou, where the hard drives were made and sold, Xinhua said.

Xinhua said the action against the counterfeiters was carried out late last year. It did not say why the news was only announced on Saturday but it came shortly after US President Donald Trump ordered his trade chief to begin the process of imposing tariffs on all imports from China.

The investigation into the fake hard drives began after Hewlett Packard filed a complaint, Nanjing police were reported as saying. Hewlett Packard did not immediately respond to requests for comment outside business hours. 

The suspects would buy cheap, old and discarded hard drives abroad, modify the data on them, repackage them and sell them at a 60% profit, the police said. 

Police had been shocked at the scale of the operation, in which hundreds of people were employed. 

(Reporting by Brenda Goh; Editing by Robert Birsel)

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