China Focus: Consumer-led growth demands better consumer rights protection

As China pins its hopes on domestic consumption to bolster its economy at a time of subdued exporting and investment, the need for better product quality and protection of consumer rights is firmly in the spotlight.

People will only be willing to spend more when they are reassured about product quality and that their rights will be protected, experts have observed.

INFERIOR PRODUCTS A NUISANCE

Decades of rapid economic growth have made the Chinese more affluent but headline-making food scares and fraud in recent years have also left them hesitant to spend.

The most high-profile case in point is the tainted baby formula scandal that came to light in 2008, which has unnerved Chinese parents and forced them to seek foreign alternatives.

The Chinese milk industry has yet to recover from the damage despite efforts by the major players and the government to clean up its practices.

The annual "3/15 Consumer Rights Gala", timed for World Consumer Rights Day and aired on China Central Television (CCTV) on Sunday night, brought more fraud and inferior products to the attention of the public.

For example, despite knowing about faulty gearboxes in its Evoque model, automaker Land Rover failed to remind drivers of the problem, putting their safety at risk, the program alleged.

In contrast to Land Rover's hushing-up its imperfections, the after-service centers of car companies including Shanghai Volkswagen, Mercedes-Benz and Dongfeng-Nissan are in the habit of maximizing profits by carrying out unnecessary repairs and replacements, reported CCTV.

The program also pointed to companies selling ineffective or even harmful dietary supplements and health devices.

Though many of the companies at the center of the reports swiftly issues statements promising corrections, damage has already been done to consumer confidence.

CONSUMPTION GROWTH A KEY

In 2014, consumption contributed 51.2 percent of GDP growth, highlighting the growing importance of consumer spending among China's three economic drivers (the other two being investment and exports).

To encourage growth in consumption, Chinese authorities have improved laws and regulations to better protect consumers.

China overhauled its Consumer Rights Protection Law in 2013 and the new version was made effective on March 15 last year.

The new law offers consumers more rights. For example, without specifying reasons, they can return purchases and ask for a refund within a week of receiving goods bought online.

At a press conference after the conclusion of the annual legislative session on Sunday, Premier Li Keqiang urged owners of both online and bricks-and-mortar stores to show business integrity and put the quality of their products above everything else.

To guide the development of booming e-commerce, Chinese legislators also plan to have finalized an e-commerce law by the end of this year.

There was a notable increase in consumer complaints last year. A total of 1.16 million complaints were filed with quality watchdogs, up 14.3 percent to a five-year high. Some 77,800 complaints were related to online shopping, up 356 percent.

CONCERTED EFFORT A MUST

Despite improved laws and growing consumer awareness of their rights, there is still a long way to go to consistently right the wrongs of dishonest market players.

"On one hand, ordinary consumers face a time-consuming, expensive and arduous litigation process when they choose to sue sellers," said Li Yuanguang, vice chairman of the China Consumers' Association, stressing that lawmakers must come up with more practical rules to make the new consumer rights law more consumer-friendly.

"On the other hand, there are people cynically cashing in on the new law by demanding exorbitant compensation from sellers."

Li said supportive policies related to the new law should also be put in place as soon as possible, citing protection of personal information and accountability of online platforms.

"The rising number of litigation cases actually reveals a business environment that does not value integrity," said Hao Qingfeng, a senior consumer rights law researcher.

Hao suggested that there should be "a more rigid corporate integrity supervision mechanism in place to enhance enterprises' sense of discipline".

"This is not just a matter between enterprises and consumers. We must see joint efforts from all supervisors such as industrial and commercial regulators, quality watchdogs and the media," he added. Endi