Fight the Bootlegs: Consumer Rights in China

Fight the Bootlegs: Consumer Rights in China
May 11, 2010 By

Any expat worth her salt knows that virtually any service one desires can be had in China, and often for much cheaper than back home. From its massive, tackily futuristic shopping malls to its subterranean markets, China is often touted as a consumer’s paradise, where everything from the latest DVDs, genuine “ancient” swords and finely-crafted rocking chairs are available at rock-bottom prices. But what to do when that brand new Lenovo laptop suddenly goes bust, or when a pair of just-purchased Peak high-tops fall apart on day two? That’s where consumer protection comes in. As with many other developed (and developing) nations, China has a raft of laws on the books to ensure honest business practices and prevent the consumer from being had, or worse. But what exactly is consumer protection, and – this being China, after all – are the laws enforced, and are they effective?

The right to buy in peace
On March 15, 1962, United States President John F. Kennedy declared that consumers should be endowed four basic rights: the right to safety, the right to be informed, the right to be heard and the right to choose. In honor of this speech, World Consumer Rights Day has been celebrated annually on March 15 since 1982. While the specifics of consumer rights vary from country to country, there are some basic continuities. In essence, the aim of consumer rights and consumer protection is to ensure that consumers are sold only high-quality products and services, and to prevent fraudulent and unfair business practices that might lead to a commercial environment inimical to the consumer. While the most obvious, and arguably the most important, manifestations of consumer protection deal with ensuring food and product safety, there are a number of other general aims of consumer protection laws and organizations. These include the regulation of debt and credit repair, utilities services, loans, service and sales contracts and fair pricing. Consumer rights laws also prohibit misinformation in labeling and advertising and privacy infringement. In many countries these laws are monitored and enforced by specific governmental bodies, as well as non-governmental organisations like the Better Business Bureau in the United States and Canada and Which? in the United Kingdom.

Who’s in charge
In China, the governmental body responsible for protecting the rights of consumers is known as the State Administration of Industry and Commerce (SAIC), whose stated purpose includes taking the complaints of consumers and protecting their legal rights, punishing counterfeiters, prohibiting monopolies and pyramid schemes, and regulating product safety and food quality. In addition to the SAIC there is also the China Consumer’s Administration (CCA), a government-funded organisation with thousands of branches spread throughout China. The CCA is responsible for providing information to consumers through such mediums as its advertisement-free magazine China Consumers Monthly, receiving costumer complaints, publicizing anti-consumer infractions, appraising product quality, and assisting consumers in taking their cases to court and providing representation. Recent actions by the CCA have been made toward strengthening consumer education, performing more research on complaints of automobile malfunction and medical malpractice, and increasing food and product safety tests.

The character of the law
The Law of the People’s Republic of China on Protecting Consumer’s Rights and Interests was first adopted in 1993, and while much of its content does not vary greatly from the consumer rights laws of many Western nations, there are some noted differences. For example, one famous clause ensured consumers double the amount spent on a product so long as the consumer could prove the product was somehow falsely advertised, counterfeit or defective. A Beijing man named Wang Hai, who would later be dubbed the “Ralph Nader of China” for his crusades against anti-consumer business practices, got his start making thousands of RMB returning counterfeit goods. Wang would later start a telephone hotline through which infringements of consumer rights could be reported. More recently, Wang wrote a 3,000 word report accusing Taobao, the Chinese online-shopping Mecca, of releasing advertisements for fake goods, allowing some retailers to operate illegally, and neglecting to issue consumers proper invoices.

In 2009, it was also announced that the original 1993 consumer protection law would soon be expanded to allow for intangible goods to be protected as well, and to add a “cool-down” period for pre-paid items, items purchased online, and high-cost items, to allow consumers to change their minds.

The view from the street stall
So then, what sorts of rights are guaranteed? Pretty much just what you’d expect: The right to purchase safe, high-quality products, to return defective or counterfeit products, to be properly informed about what one is purchasing, to seek redress of claims of infringement, and even the ability to form groups to better protect one’s consumer rights. But how does this actually play out? Well, one year after Wang Hai accused Taobao of negligent and possibly illegal behavior, the company launched a new service to enable consumers to make complaints against sellers, which the sellers must respond to within forty-eight hours, otherwise Taobao will intervene. The company also promises to solve any costumer complaint within seven days, and to set up a section of the website to help expose sellers with poor credit.

As for the Sanlu milk scandal of two years ago, in which six children died and 300,000 were made sick due to a simple lack of regulation, two people were sentenced to death, another two to life imprisonment, and the company – which was soon disbanded – was fined 50 million RMB. However, a number of other companies that had produced tainted milk were uncharged, and many saw the Sanlu case as merely a show trial. Furthermore, efforts by affected families to organize were broken up by police, and an emergency inspection of possibly tainted milk still on the market was performed as recently as February 2010. And earlier this year when officials in Wuhan announced that they had destroyed 3.5 tons of toxic cowpeas from Hainan, officials in Hainan complained that the Wuhan officials broke an “unspoken rule” by reporting directly to the public rather than first speaking with the counterparts in Hainan.

In the end, China remains the bootleg capital of the world; strongly worded law or not, one cannot honestly expect that every instance of counterfeiting or safety standards infraction will be punished. The population, as every Chinese person will unfailingly reply when asked about any problem in her country, is simply too large. Further, most expats would also be hard put to deny that they have been the beneficiaries of this culture of piracy, even if it meant just getting some super-cool Nike socks on the cheap.

To wrap things up, ripping-off consumers is just as illegal in China as it probably is wherever you’re from, and consumers do, theoretically, have some recourse. Still, clear as Chinese law may be about protecting consumers and punishing illegal business practices, proper redress is not necessarily so easy to come by, even if one is absolutely positively sure that one has been had. So the next time you’re in some back-alley market about to buy a stereo whose price seems too good to be true, think twice, and go to a licensed retailer.

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