Consumers' rights are essential part of supply-side reform

2016-03-17 09:22China Daily Editor: Qian Ruisha

With much fanfare, China's state broadcaster China Central Television named and shamed a bunch of wrongdoers, particularly some e-businesses, in its annual gala to mark World Consumer Rights Day, which fell on Tuesday this year.

Such a ritualized media campaign against suspected business misconduct is certainly of value to Chinese consumers who deserve stronger protection from all kinds of frauds, fake goods and poor services.

Unfortunately, it has become increasingly less influential because of both declining audience ratings resulting from the fierce competition the traditional broadcasters face from Internet-based new media, and the lack of effective follow-up efforts in the past to address rising consumer complaints.

However, this is not a challenge only for CCTV.

Chinese policymakers should also recognize the very urgent need to significantly strengthen protection of consumer rights, and implement stronger legislative and administrative measures. If Chinese consumers are expected to do the heavy lifting to push forward economic growth, their legal rights must be expanded and defended in line with the latest developments in consumption patterns and trends.

In other words, promoting the greater satisfaction of Chinese consumers will determine the speed and sustainability of consumption-led growth.

In 2015, consumption contributed 66.4 percent to GDP, up 15.4 percentage points from 2014. The unexpected decline in exports and sluggish investment growth disproportionately enlarged the contribution consumption made to the Chinese economy last year.

But there are two consumption trends in China that have demonstrated their potential to give fresh impetus to the economy. One is the jaw-dropping surge in online shopping among Chinese consumers. The other is their unbelievable love of foreign goods such as the high-tech toilets they are snapping up in Japan.

While domestic enterprises should do their best to tap the spending power of Chinese consumers at home, Chinese policymakers should also heed their calls for better protection of consumer rights.

In its World Consumer Rights Day program, CCTV was keen to point out that online shopping is now the main source of the complaints it received from consumers. The China Consumers Association also said that complaints about online shopping made up nearly 70 percent of all complaints last year.

The prevalence of shoddy or fake goods in the online marketplace has clearly become a problem that both China's e-business giants and the regulatory authorities need to take it more seriously.

It is true that the very convenience of online shopping will encourage Chinese consumers to spend more in coming years. But that does not mean unchecked online fraud or fake goods will not dent their enthusiasm and erode the credibility and thus profits of e-businesses.

As a country eager to get its more than 1.3 billion people to spend more to drive economic growth, these issues need to be tackled as aggressively as possible.

Meanwhile, Chinese shoppers' growing appetite to spend abroad signals their dissatisfaction with the quality of domestic products and services.

Chinese consumers spent 1.2 trillion yuan ($185 billion) overseas last year. If Chinese policymakers and enterprises would like the country's growing middle classes to spend more of their money inside the country, they must attach greater importance to satisfying Chinese consumers with upgraded products and improved services.

It is widely believed that the next five years will be a crucial period for the world's second-largest economy to double its size and per capita income by 2020 from 2010 levels. That kind of achievement will greatly swell the number of middle-income consumers in this country to power consumption-led growth.

To realize that goal, China's ongoing supply-side reforms need to be more consumer-oriented. That requires greater efforts to strengthen the protection of consumer rights and build a more consumer-friendly domestic environment.


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