Origin
According to the Xiandai Hanyu Dictionary, (现代汉语词典), "Shanzhai" can stand for two meanings:
- A fenced place in the forest.
- Villages in the mountain that have stockade houses.
Historically, "shanzhai" is sometimes used as a metaphor to describe bandits who oppose and evade the corrupted authority to perform deeds they see as justified. One example of such bandits is the story of Outlaws of the Marsh (水浒传)
The use of "Shanzhai" to refer to imitation products comes from Cantonese slang, in which "shanzhai factory" means an ill-equipped, low-end and family-based factory. However, with the accumulation of profit, quite a few of those factories invest a lot of money to improve their equipment. Some factories also get investment from someone other than family members. Nowadays, a significant portion of Shanzhai factories are no longer ill-equipped or family-based. And their products are no longer poor-quality. Yet they still can not escape the fate of no-brand (or fake brand), not-for-sale in top department stores with non-shanzhai phones. One of the motivations for going 'Shanzhai' is the difficult regulations the Chinese government has established to become an official cell phone manufacturer. So to avoid the hassles companies try to operate under the radar. They can avoid taxes that way and also avoid regulation.
Another account of the origin is that because imitation electronic appliance manufacturers are largely located in Shenzhen, thus wholesalers from other parts of China started calling their products "Shenzhen product". Yet gradually "Shenzhen product" became "Shanzhai product" because they sound similar when people speak mandarin Chinese with a Cantonese accent.
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