China's new consumer spending plan: No more scams, no more shoddy goods

Beijing launches a bold plan to boost consumer spending, crack down on fraud, improve product quality, and create a safer, more reliable market for shoppers across China

China has introduced a new initiative to enhance consumer spending by addressing fraudulent practices, substandard goods, and other deterrents that discourage purchases. The plan is part of Beijing’s broader strategy to stimulate economic growth amid escalating trade tensions with the United States, according to a report by South China Morning Post.

 

China’s consumer-focused plan 

Developed jointly by five government agencies, the 19-point framework focuses on creating a more reliable consumer market. Authorities aim to resolve major consumer concerns, such as unclear pricing, deceptive advertising, and inadequate product quality, with a target of significant improvements by 2027.  

 

The State Administration of Market Regulation emphasised that improving the consumer environment is key to restoring confidence and boosting economic activity. The agency stated that fostering a fair and transparent marketplace plays a vital role in China’s pursuit of high-quality economic growth.  

 

Recent efforts to boost domestic consumption include raising quality standards across key industries, such as automobiles, home appliances, and food products. Additionally, authorities will support the growth of local industries, including jewellery and leather goods, to encourage spending on domestically made products, the news report said.

 

To tackle consumer grievances, the plan proposes strict enforcement against food fraud, online scams, misleading travel bookings, hidden TV fees, and counterfeit goods, particularly in rural areas.  

 

Creating a unified, competitive market   

Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank based in Guangzhou, highlighted that improving consumer confidence is integral to the broader economic strategy. He noted that Beijing is working toward a more unified national market, with key initiatives focusing on antitrust enforcement, better credit systems, stronger intellectual property protection, and tighter regulation of digital platforms, the news report mentioned.

 

To safeguard buyers and sellers, local governments are encouraged to implement advanced compensation mechanisms. Additionally, traditional retail stores will be incentivised to offer a standardised national return and exchange policy to improve shopping convenience.  

 

Expanding opportunities for consumer spending   

The plan also seeks to create new spending opportunities by developing mixed-use commercial hubs that integrate retail, tourism, cultural, and sports facilities. Another key aspect is the promotion of ‘15-minute cities’, ensuring residents have access to essential businesses within a short distance. Efforts are also underway to expand access to trusted online and offline shopping destinations.  

 

In a notable move, President Xi Jinping recently met with top business leaders, including Alibaba founder Jack Ma, in a gesture of support for private enterprises. Beijing has pledged to further integrate private firms into key national projects, particularly in large-scale equipment upgrades and trade-in programmes for consumer goods.  

 

Additionally, authorities have committed to increasing household incomes to drive spending. Trade-in programmes for major purchases, such as home furnishings, appliances, and smartphones, will be expanded to encourage consumers to invest in high-value products.  

By implementing these measures, China aims to create a more robust consumer market that drives sustained economic growth.

 

From knockoffs to original purchases 

China has been implicated in flooding foreign markets with cheap goods, including counterfeit products, leading to economic tensions and protective measures from other countries. For example, during the height of the Covid-19 pandemic, some Chinese manufacturers engaged in a concerted campaign to flood the world market with fake face masks, complete with falsified certifications.

 

Similarly, counterfeit paintings from China have been found circulating in the market. This practice extends beyond just counterfeit goods; a glut of inexpensive Chinese products, such as steel, cars, and solar panels, is being exported, causing friction with major trading partners like the United States and the European Union, as well as in Southeast Asia where local industries are struggling to compete.

 

Chinese knockoffs significantly impact the Indian market through various channels. In 2015, knockoffs in the fast-moving consumer goods (FMCG) sector alone caused losses to the Indian government of nearly $880 million, with almost 22 per cent of the packaged goods industry affected.

 

Indian brands hit by Chinese fakes

 

Many Indian brands have been counterfeited in China. In 2016, the Indian Embassy in Beijing reported that brands like Natraj, Raymond, Fevicol, Onida, Godrej, JK Files, and Dabur were being faked.

 

Counterfeit goods routinely enter India through ports. In one instance, 12,000 pairs of shoes worth Rs 3.5 crore were confiscated from a container from China in Chennai in 2017. 

Importers often mis-declare these items as unbranded to avoid detection, and manufacturers use fake UPCs to make authentication difficult. Several Indian markets are known for offering counterfeit products. The US Trade Representatives' 2023 Notorious Markets List identified Heera Panna in Mumbai, Tank Road in Karol Bagh in New Delhi, and Sadar Patrappa Road Market in Bengaluru as places where counterfeit goods are readily available. Heera Panna, for example, reportedly offers counterfeit watches, footwear, accessories, and cosmetics that may pose health and safety risks.