Chinese counterfeit stamps: Economic warfare against the UK?

Earlier this month, The Telegraph revealed the results of an investigation into counterfeit stamps circulating in the United Kingdom (UK). The results were troubling: major suppliers in the People’s Republic of China (PRC) were offering to print high volumes of exceedingly convincing fake Royal Mail stamps and deliver them to Britain within mere days. 

‘Security experts’ in Britain have implied Chinese state involvement in the counterfeit printing operations, leading the scandal to be labelled as an example of the PRC’s economic warfare against the UK. This accusation has circulated widely in the British media. In response, the Chinese embassy in London has attempted to manage the surrounding narrative by dismissing such claims as ‘absurd’. 

Hundreds of British citizens have faced £5 surcharges as a result of unwittingly using counterfeit stamps produced in the PRC, purchased in branches of the Post Office, small supermarkets, and online marketplaces such as Amazon and Ebay. The stamps could be bought in bulk for as little as four pence each, and were complete with replicates of the barcodes introduced to genuine Royal Mail stamps in February 2022. 

Royal Mail has grappled poorly with the fallout, insisting its processes are secure, and that specialised equipment is used to verify stamp authenticity.  The confusion surrounding the episode, combined with the Royal Mail’s muddled and defensive response, has dented its credibility. A loss of public confidence in a cornerstone of the UK’s communication infrastructure has longer-lasting and more insidious effects than the direct financial losses from the counterfeit operations themselves. 

Three Chinese printing operations have been identified as the source of the scandal: a Shenzhen factory claiming a production capacity of one million counterfeit stamps per week; a Quanzhou firm offering large quantities of first-class large barcoded stamps; and a Shanghai supplier which requires a minimum order of 20,000 stamps.

A British response?

A few conclusions can be drawn from these developments. These are highly sophisticated and industrial-scale forgery operations. The aforementioned facilities in the PRC are capable of producing fake stamps indistinguishable even to Royal Mail experts. They must, therefore, utilise state-of-the-art equipment capable of high-resolution production, able to mimic closely the security features of genuine stamps, including barcodes. The rapid delivery of high volumes of these counterfeit stamps to the UK points to a well-established logistical network. Counterfeits must be able to meet visual and textural standards which can evade detection within postal systems, suggesting advanced quality control measures. Undoubtedly, these operations are driven by substantial investments in advanced printing technology. Is it unreasonable, then, to assume in these operations Chinese state complicity – or at the very least, a knowledge of their existence?

Voicing this concern openly is unwise until there is irrefutable evidence that the Chinese government is aware of the counterfeit printing facilities. It can be assumed with reasonable doubt, quietly, that this is the case. Certainly, given the regulatory environment in the PRC and close monitoring of economic activity by the state, the substantial resources, technical expertise, and coordination demanded by the counterfeit operations would be tricky to achieve without some level of government awareness. 

Certainly, state involvement in counterfeit printing operations would fit into a broader picture of Chinese economic interference in the UK, and attempts to undermine confidence in British institutions. Just weeks ago, the British government publicly accused the PRC of attempting to disrupt the British electoral process, as it emerged that Chinese state-backed hackers targeted the Electoral Commission, accessing the personal details of approximately 40 million UK voters.

It is also clear that a concerning trend of Chinese involvement in counterfeit postage operations in Britain is evolving in parallel in the United States (US). In May 2023, for example, Chinese national Lijuan Chen was arrested for using counterfeit postage to ship millions of parcels, resulting in estimated losses of over US$60 million (£48.2 million) for the US Postal Service. Additionally, in March 2023, US Customs and Border Protection intercepted 4,080 counterfeit US postage stamps originating from the PRC at Dallas-Fort Worth International Airport. 

However, accusations of Chinese government involvement in the scandal where evidence is as yet absent – while it is unclear whether or not counterfeit facilities are part of an independent organised crime syndicate – serve the interests of the Chinese Communist Party (CCP) and can be seamlessly integrated into its discursive statecraft against the UK. The CCP may well subtly frame these accusations as part of a broader Western strategy to undermine the PRC’s rise as a global power, something which fits neatly into the CCP’s broader approach of depicting the actions of ‘Western’ or ‘Anglophone’ powers as hostile attempts to contain the PRC. This narrative serves to reinforce the party’s portrayal of itself as a victim of Western aggression, which it utilises to rally support both domestically and internationally.  

Finally, unfounded allegations run the risk of being dismissed as examples of unjustified British paranoia about the CCP. The Chinese Embassy spokesperson’s comment: ‘How could one imagine a sovereign country triggers war by bringing fake stamps? (sic)’, is disingenuous to its core. Counterfeit stamps have been deployed as a means of economic warfare since the first World War, serving the dual purpose of incurring financial losses to the postal institutions and eroding public confidence in their integrity. For those unfamiliar with these historical precedents, however, the strategic use of seemingly benign tools like stamps in broader geopolitical conflicts may well be dismissed as fear-mongering.

State involvement in counterfeit printing operations would fit into a broader picture of Chinese economic interference in the UK, and attempts to undermine confidence in British institutions.

This is not the time to make public accusations based on incomplete evidence. If this is indeed another example of the multi-pronged attack the CCP is launching on the social fabric and institutions of the UK, what good is there in shouting about it to talk shows on the radio and television? This is a time for Britain to work quietly – and quickly. Steps need to be taken to enhance measures to safeguard postal service integrity. The loss of faith in Royal Mail, which is becoming ever more widespread after recent revelations about the two-decade long Horizon scandal, will need careful and proactive steps to counter. 

Royal Mail would benefit from adopting a proactive and transparent approach to restore and maintain public trust. The organisation would also do well to strengthen collaboration with international customs and postal services to trace distribution of counterfeit items, and engage openly with the public and stakeholders, detailing the steps being taken to address the issue and the progress of these initiatives. Intelligence services in the UK should collaborate closely with American partners about this issue, and launch a joint investigation into the source of the printing facilities in the PRC.

Britons – policymakers, journalists, and the general public – need to protect their national interests and security against all potential acts of economic warfare. Countermeasures should transcend immediate tactical responses and address the underlying, broader strategic threats. Indeed, at a first glance, many of these threats may seem trivial and innocuous – a drip of water on stone. But erosion works in just this way: carried out over a long period of time, trickling water can cut paths through a mountain. Broader Chinese strategy envisions slowly chipping away at democracies and the systems underpinning them. British systems should be safeguarded against this gradual degradation of trust and integrity, and robust enough to withstand the protracted long-term challenges presented by the CCP.

Elizabeth Lindley is a Policy Fellow at the Council on Geostrategy.