The State Administration for Industry and Commerce has pledged to intensify the crackdown on the sales of fake products online in China. The remarks by the regulator’s head, Zhang Mao, came after a high-profile spat between the government body and the e-commerce giant Alibaba earlier this year. “Market order can only be regulated if we increase the penalties for selling fake goods, making traders who sell such goods unable to continue operations, or go bankrupt,” Zhang said during a press briefing at the National People’s Congress in Beijing today. For all the latest news from China’s parliamentary sessions click here The cost of breaking exiting rules was too low, which resulted in many illegal practices in selling counterfeit goods online, he said, in response to a question on the sale of fake goods on Alibaba’s online shopping platform, Taobao. A credit record system for traders would be established, he said, with shops selling fake or poor quality products subject to restrictions in their business operations. “[The credit record system] will force firms to be more disciplined, addressing the root of the problem,” Zhang said. He said many online stores made exaggerated claims about their goods and the authorities needed to put more regulations in place to ensure a healthy online shopping market. E-commerce platforms should also take the responsibility to ensure credibility of online shops, Zhang said, urging them to strengthen internal controls. Regulating an online shopping market was difficult as it “breaks time and space”, and more communication between the government and firms was necessary, he added. Online shopping transactions in mainland China reached 2.78 trillion yuan (HK$3.5 trillion) last year, representing 10 per cent of consumer product retail sales. The administration in January accused Alibaba’s Taobao of selling counterfeit goods, but the company said the government body’s sampling methods were unfair and misleading. Zhang also commented on the disputes over “parallel trading” in Hong Kong, where mainland vendors buy goods cheaper in the territory and then sell them over the border. Critics say it creates shortages of goods in Hong Kong. Parallel traders’ consumption patterns have been a thorn in the side of Hongkongers recently, with many people protesting against mainland shoppers in the territory. The dispute has given rise to calls for Hong Kong to restrict the multi-entry travel scheme for mainlanders. “The bulk purchase by those parallel traders has created inconvenience to people in China,” Zhang said. “This also disrupted market order, and the operating space for other firms is also being squeezed.” The country’s anti-smuggling department had joined hands with relevant authorities, including the commercial regulator, to seriously crack down on such trading, he added.