Tougher penalties urged for 'double standard' companies

Updated: 2012-10-27 01:24

By Zheng Xin (China Daily)

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Legal experts are calling for tougher punishments for companies that sell substandard and overpriced products in China.

At an open-day event on Wednesday, the Beijing Administration for Industry and Commerce disclosed that it had fined Nike 4.87 million yuan ($780,700) for selling in China a brand of sneaker that had only one air cushion in each shoe, while advertising in the country and abroad that the shoes' midsoles have two air cushions.

Nike recalled the shoes and offered refunds in September 2011.

"This is not only discriminatory to Chinese consumers, but also a violation of Chinese laws and regulations," said Yi Shenghua, a lawyer at Yingke Law Firm in Beijing.

"We should reflect on the regulatory system and government standards in the country while stepping up punishment for this kind of behavior," he said.

Xue Guifang, director of the board of consumer rights protection at the China Law Society, agreed, saying: "Industries, especially world-renowned businesses, should not only provide world-class products, but also first-class respect to consumers."

According to the administration, Nike set the price in China for the high-end basketball sneaker, the Nike Zoom Hyperdunk 2011, with double air cushions at 1,299 yuan, more than 500 yuan higher than a pair sells for in other countries. However, it was later discovered the company misled customers, as each shoe had only one air cushion, not two.

The Beijing Administration for Industry and Commerce said Nike has different standards for Chinese consumers and those elsewhere.

Such behavior is a violation of consumers' rights, an official with the publicity department of the administration told China Daily on Friday, who spoke on condition of anonymity.

However, an official from Nike's public relations department said the issue was simply a mistake, and denied the company had a double standard for China and elsewhere.

"Some promotional materials associated with the product incorrectly stated that two Zoom Air units were included in the heel and forefoot of the shoe," Nike said in an e-mail to China Daily on Friday.

"The Nike Zoom Hyperdunk 2011 did meet both the quality regulations set by the relevant Chinese governmental agencies and Nike's own performance standards."

The official said Nike accepts and respects how Chinese authorities have handled this issue to date, and Nike will make sure all its products sold in China comply with the country's standards and regulations while remaining committed to delivering quality products to consumers in China and around the world.

Experts said it is not the first time that Chinese consumers have been treated differently.

"The deceptive advertising and double standards for the products of some international companies are growing more and more common these days," Yi said. "Many of the international giants should be attaching more attention to the Chinese market."

The Chinese government should do more to protect the rights of consumers, he added.

Liu Weifang, a student with Imperial College London, said most of the footwear and clothes for her family are purchased from abroad, where she said they are of better quality and cost less.

"My parents came to visit me this summer and went back with their suitcases filled with clothing, footwear and daily accessories," said the 26-year-old student majoring in translation. "The price difference is almost half of an air ticket from home, plus the goods are of better quality."

Yi, the lawyer, said one of the reasons that costly and inferior products are scattered around the country are the low penalties for companies that flout the law.

"Many industries, including clothing, food and electronic products, are pursuing a double standard in China, partly because of the insufficient punishment," Yi said.

Many domestic enterprises also have a double standard, providing overseas markets with better products and leaving their compatriots with goods of lower quality, Yi said.

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