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It appears that Chinese officials are closing down the fake Apple stores, not because they were ripping off Apple's intellectual property, but because those businesses had failed to obtain proper Chinese business licenses.http://www.itworld.com/it-managementstrategy/186353/chinese-officials-sh...
This poses a perplexing problem for Apple. Apparently there are several fake Apple stores in China.
But this is not hurting Apple's sales too much, as Apple's official Chinese stores are their most profitable in the entire chain.
Since there are plenty of Chinese citizens buying real Apple products, the question is what would Apple risk by lowering their prices (and "Coolness") to meet the Chinese market and undercut the scam artists? Probably more than they're willing to do. I'm not sure how much sway Apple would have with the Chinese government; but this is probably an issue worth involving the State Department, since all of Apple's products are manufactured in China. There is little risk of Apple pulling their factories out of China in an attempt to reign in the counterfeit market.