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UPDATED: March 26, 2012 NO. 13 MARCH 29, 2012
Protecting Consumers
The war between consumers and companies rages on
By Zhou Xiaoyan

DESTROYING COUNTERFEIT MEDICINE: On March 15, the World Consumer Rights Day, staff from the Beijing Drug Administration destroy over 50 tons of counterfeited medicine in the city's Changping District (CFP)

Despite the government's efforts, supervision is far from enough.

In those exposed cases, government departments share the responsibilities as well, said Dong Yuyu, a commentator at the Beijing-based Guangming Daily.

For example, multinationals are famous for their high-quality product and standards. Chinese often have higher expectations for them than for our local brands, but sometimes they turn "evil" as soon as they land in China, said Dong.

"That's because we lack efficient supervision. Without a sound supervision system, we can't expect them to follow strict rules as they do in other countries," said Dong. If supervising departments can't perform their duty well, there will be more and more multinationals that won't carry out their promises in China.

Raising compensation

Chinese consumers have become more aware of their rights when shopping or buying services, as indicated in the number of complaints they file each year.

China Consumers' Association (CCA), a nationwide organization for receiving consumer complaints and protecting consumer rights established in 1984, received 607,263 complaints from consumers in 2011, which ranged from quality, prices and contracts to safety, and targeted the auto industry, food safety, express delivery and financial services. Among the total, 571,918 were addressed.

But the compensation is very low. According to the CCA, almost 804.18 million yuan ($127.3 million) in losses was recovered last year.

The average compensation of each case for Chinese consumers was about 1,000 yuan ($160) while the figure in the United States is close to $350,000, according to the CCA.

The problem is the high cost for consumers to fight for their legitimate rights, both in terms of time and money.

When their consumer rights are infringed, only 20 percent of Chinese consumers manage to get corresponding compensation in the end, according to a survey conducted by China Youth Daily in March 2011. More than 25 percent of the respondents have given up fighting for their consumer rights because of high costs and low compensation.

"Generally speaking, the time cost and economic cost are both too high for Chinese consumers to demand compensation," said Qiu Baochang, head of the legal team of the CCA.

"This situation must be changed. The cost should be lowered to make it more convenient for consumers to protect their legitimate rights," he said.

"We should learn from developed countries, which give more incentives to consumers to protect their rights on their own," said Li Jun, a law professor at the University of International Business and Economics. For instance, a U.S. woman got $460,000 in compensation from McDonald's because her lips were burned by coffee that was too hot.

The government should enhance the level of compensation and give consumers more leverage when bringing lawsuits against companies, such as simplifying procedures and allowing consumers to file litigation on weekends when they have more free time, he said.

"If high-level compensation like in the United States can be realized in China, no companies would dare to take the risk of ignoring Chinese consumers," said Li.

Improving legal system

The current legal system, which is still playing catch-up with a consumer society, is another obstacle standing in the way of Chinese consumers and their legal rights.

China's legal system doesn't have severe enough punishments for irresponsible companies, said Li Er, a commentator at Shenzhen Economic Daily.

"But the most important reason for companies' ignorance of Chinese consumer rights is that we don't support a class-action lawsuit system," Li said.

Countless cases tell us that when confronted with large companies Chinese consumers are often left to their own defense. The CCA is more of an intermediator than a real representative for consumer profits.

"The most urgent task is supporting class-action lawsuits and making CCA the real representative for consumers in class-action suits," said Li.

With the absence of the class-action lawsuit system, Chinese consumers can only see an apology letter, pledging to right its wrongs and immediately investigate the isolated incident, on McDonald's China's official website after the food scandal, instead of getting hundreds of thousands of dollars in compensation like the woman in the United States.

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