Costco and the high-drama world of bulk toilet paper

Somewhat randomly the other day I started wondering whether Costco has any sort of presence in China. There are 5 Costco stores in Taiwan (the first one opened in 1997 in Kaohsiung and the latest just opened in November of this year, in TaiChung) and my aunts in Taiwan are always chattering away about the latest deals they got by buying, I dunno, 10,000 rolls of toilet paper at once from the Costco near them. (Incidentally, judging from the drop-down menu provided on their webpage for searching country locations, Costco considers Taiwan a separate country.)

It seems that Costco did once have a presence in China, sort of, in the form of PriceSmart, which Americans will recognize as another incarnation of Price Club, which merged with Costco in 1993. PriceSmart licensed out its name in 1996 or 1997, depending on which news source you read (you’ll need a subscription to read all of that Caijing article I just linked, by the way), to a guy named Liu Wuyi who managed to grow PriceSmart into a chain of 47 (or 48 - again with the differing sources) stores in China that went bankrupt in 2004. Liu fled the country in March 2005 amidst a scandal involving fake contracts and the diverting of funds from several PriceSmart stores, and as of March 2007, at least, is still at large. He has been sentenced to life in prison and seven other top managers from the company received shorter sentences.

As if that wasn’t enough of a surprise, my idle research about Costco in China also turned up an urban myth saying that Americans should boycott Costco because it’s owned by China and the name stands for “China Off-Shore Trading Company.” Mythbusting website Snopes.com helpfully explains that this (incorrect) belief probably comes from the existence of a Chinese company called COSCO, which stands for China Ocean Shipping Company.

(I am, by the way, extremely familiar with Snopes because at my old job, well-meaning secretaries were constantly sending company-wide emails to every single Time Warner Book Group employee — thousands of them, across three states — warning us all about some one or other ludicrous calamity that would befall you if you happened to type this combination of keystrokes or use that lethal combination of products or whatever, and my friend Daniel down the hall would always hit reply-all with a link to Snopes that debunked that particular myth…eventually the network support guys got a clue and limited access to the “company-all” email address to just upper management.)

Anyway, after happening upon the Costco myth, I inititally had the urge to do some more research and try to find out what other China myths are out there and analyze what they reveal about American attitudes and fears towards China, but then I decided that whatever I learned would be too depressing.

Eveline Chao