Even Larry Niven didn't take it this far.

A Chinese cosmetics company is using skin harvested from the corpses of executed convicts to develop beauty products for sale in Europe, an investigation by the Guardian has discovered.

Agents for the firm have told would-be customers it is developing collagen for lip and wrinkle treatments from skin taken from prisoners after they have been shot. The agents say some of the company's products have been exported to the UK, and that the use of skin from condemned convicts is "traditional" and nothing to "make such a big fuss about".

The Guardian article's source was an agent of the company, which has, they say, exported collagen products to Britain in the past, although they do not know whether it is currently doing so.

When formally approached by the Guardian, the agent denied the company was using skin harvested from executed prisoners. However, he had already admitted it was doing precisely this during a number of conversations with a researcher posing as a Hong Kong businessman.

If true, I can't see this being good for the kipperlips industry (errr . . . you have all seen my Mick Jagger impression, haven't you?) - but the question, of course, is whether it's true. There will be strenuous denials from people I wouldn't trust to speak my weight, of course, but being morally flexible in general doesn't prove anyone's lying in a particular case. One informal chat isn't solid proof. One to watch. There have, of course, been many stories about organ and tissue harvesting from the Chinese capital punishment program, and from (Baathist) Iraqi jails also (while they were nominally our friends back in the Eighties, IIRC). I've not come across allegations about cosmetic products before, though.
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I'm a bit flummoxed by all this and can't decide whether it's right or wrong. We've been harvesting parts of the dead in order to benefit the living for a while now (transplants etc.), usually with the consent of next of kin though. We've been killing animals for cosmetic purposes for centuries (e.g. cochineal). On that level, using bits of dead people for cosmetic purposes doesn't seem out of line. But morally, I suppose one should say that utilizing bits of dead people should only be for medical reasons but where do you draw the line? Is fixing the enormous hook-nose of someone suffering depression from it medical or cosmetic? Is it all about consent? What does a dead person care about what happens to his or her corpse?

It's a whole can of worms.

At the very least, potential users of this company's products should be made aware that it contains human bits. I'm guessing it's illegal in the UK to use human tissue in cosmetic products anyway?

Oh now I'm getting images of the liposuction bag theft scene from Fight Club
I think the main difference (ignoring the squick factor) is one of consent. I somehow have my doubts that the executed convicts signed a donor release form or similar.
I have less of a problem with the consent issue as it relates to condemned criminals than to law abiding folk, tbh.

I've long thought that criminals should forfeit certain human rights as part of their punishment. After all, prison infringes their human right to be able to roam free without impediment. Why not also take away their rights over their corpse after execution? While we're at it, why not take away their basic human rights to a pool table, colour TV and football in the courtyard?
That may be an attitude the criminal justice system takes. Whether the medical profession should take the same view is a rather different matter.
I have less of a problem with the consent issue as it relates to condemned criminals than to law abiding folk

And no problem with capital punishment even for relatively trivial crimes, then? [wikpedia]
Is the implication that beauty products may contain bits of dead people, or only that they may have been tested and/or developed on dead people? if the latter, I'm all for it; it's better than testing on animals, isn't it? If the latter, I guess i'm less keen, but then placental cells have been used in cosmetics, as have all sorts of toher things most of us would rather not think about.
Mind you, there is the implication here that people will be sentenced to death to supply the cosmetics industry on a supply and demand basis, heh.
It has been alleged for some time that supply and demand affects both sentence and method of execution in some Chinese courts.
That collagen extracted from executed criminals may be on sale for use in cosmetic treatments.

As well as squeamishness and ethical issues, there are health concerns. You could get anything from hepatitis to Creutzfeld-Jacob's from that sort of thing.
There was a very disturbing article in the Times over the weekend, about newborn babies going missing from delivery rooms in Eastern europe. It seems that they are whisked away, and the mother later told they were stillborn and burried. But the mothers never see the bodies, nor the graves and at least one saw her baby moving and making noise.

The really horrid part is that as well as being stolen for adoption, there is apparently a suggestion that they are being stolen for bio-research. Which is so horid as to almost incomprehensable.

It could of course just be a reporter giving the story more shock value, in fact I fervenbtly hope that is what happened as the alternative is to inhuman for words.
The implications are fairly horrific, but as you say this also is a bit tentative. I don't know if things are opening up there after their much-lauded change of government. I would hope so.
Upon re-reading the article, this could be more akin to a Alder Hay thing with the misappropriation of bodies, rather than the use of live and healthy babies which it first came over as. That would still be nasty, but many pegs down the horror ladder from live human infants being used for medical research.

It's the juxstaposition of 'thought they were disappearing for adoption' with 'bodies found to have been disected' points which gives that impression.