Chinese consumers see their rights enshrined in major legal review
Reuters in Shanghai
The mainland's top legal body has strengthened consumer rights through its revision to the Consumer Protection Law yesterday, the first major national overhaul in two decades.
The revisions increase consumer powers, add rules for the booming online shopping sector and stiffen penalties for businesses that mislead shoppers .
Regulators have been cracking down on real or perceived corporate wrongdoing, with domestic and international infant formula makers and drug makers particularly coming under the spotlight this year.
Global firms like Apple and Starbucks have also been getting caught in the glare, while South Korea's Samsung Electronics, the world's largest smartphone maker, had to apologise to customers on Thursday after a broadcast on CCTV criticised the company's repair policies.
Beijing is also trying to stimulate domestic consumers as it seeks to shift the economy towards a more consumption-driven model. But domestic consumers are often wary of product safety and quality, with 3.8 billion yuan (HK$4.8 billion) worth of poor quality goods sold on the mainland between 2010 and last year, according to the State Administration for Industry and Commerce.
"Strengthening consumer confidence will benefit the whole nation's economic development and boost domestic demand," Jia Dongming, director of the civil law working committee under the Standing Committee, said at a press briefing to announce the changes to the law.
The amendments to the 1993 law include increasing compensation for consumers and raising fines for retailers who violate the law, including in cases where faulty products lead to consumers being harmed or killed. Compensation rose from equalling the amount of damages to three times the amount.
Beijing will also strengthen the role of the China Consumers' Association, which will be able to represent groups of consumers in class actions against retailers.
Officials also stressed the growing importance of protecting consumers in the booming online shopping sector, which has expanded rapidly with the rise of market leader Alibaba's Taobao, Wal-Mart's Yihaodian and 360Buy.com
Internet sales have risen almost 50-fold since 2006 to hit 1.3 trillion yuan in 2012, according to Jia, while analysts predict e-commerce will account for a fifth of total retail sales on the mainland within five years.
The law will make it easier for consumers to return goods bought online, while sellers will bear the burden of proof in any disputes. Online retailers will also have to meet strict privacy requirements.
"The make-up and challenges of the consumer sector has completely changed and so the law has had to adapt," Jia said.