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Ethics Plan to Raise Consumer Confidence

by 5m Editor
3 August 2012, at 7:37am

CHINA - The Ministry of Commerce has started a one-year pilot program to promote a sound business culture in 10 cities to help boost consumer confidence, officials said on Thursday, 2 August.

"At present, a key impediment to domestic consumption growth is that businesses credibility falls beneath the public's expectations, and residents cannot buy goods at ease," Wen Zaixing, director of the ministry's department of market supervision, said at a news briefing.

The ministry started the one-year pilot program on Monday, 30 August, in 10 cities, including Beijing, Shanghai and Tianjin. The program, mean to ensure the quality of products and services, will be extended to the whole country after the trial, according to the ministry.

"The pilot is set to encourage enterprises to follow customer-oriented ideas and improve business environment, which will raise consumer confidence and the quality of life and thus boost domestic consumption," Mr Zaixing said.

China's 12th Five-Year Plan (2011-15) called for a long-term mechanism for expanding domestic consumption and a coordination of consumption, investment and exports to create a balanced economy.

"Expanding domestic consumption has become the top priority of China's economic development," Mr Zaixing said. ,br>
The pilot program will improve product quality, especially that of food and medicine. Enterprises are urged to strengthen quality control through better management of invoices, receipts and certificates. Service providers are called on to raise the quality of their services through staff training and management of standards. The ministry will encourage enterprises to build brands by improving the quality of goods and services.

"What we plan to do is to promote the business culture of honesty. Enterprises are encouraged to discipline themselves rather than be overseen by governmental authorities," Mr Zaixing said.

"Establishing a good business culture is more important than imposing government punishment," said Xu Wei, a researcher from the China Center for International Economic Exchanges.

China has more than 20 million enterprises, 99 per cent of which are small and medium-sized, in the wholesale and retail, accommodation and catering, life and production industries.

"A lack of business credibility will lower consumers' willingness to buy and indirectly affect the enterprises' operations by impeding production," Mr Wei said.

"The move will probably have no direct influence on expanding domestic consumption, but it will certainly advance the protection of domestic brands and raise product quality," said Ding Ningning, a research fellow at the Development Research Center of the State Council.

The media have extensively reported on domestic food safety scandals this year, including restaurants serving food cooked with "gutter oil" - cooking oil recycled from kitchen waste - and lean but harmful pork from pigs fed with the banned food additive clenbuterol. This has "severely affected the security of public health", Mr Zaixing said.