China aims to create e-commerce regulating law

By Li Qiaoyi
BEIJING: China is pushing forward efforts to institute a law to regulate the country’s booming e-commerce sector, the head of the country’s commerce regulator said on Monday.
The country’s regulatory regime for e-commerce remains insufficient, and ramped-up efforts in improving the legal aspects of the e-commerce industry have been underway, Zhang Mao, head of the State Administration for Industry and Commerce (SAIC), told a news conference during the ongoing two sessions.
Zhang did not disclose a timetable for when the law will be ­drafted.
To strengthen the oversight of the country’s e-commerce market, the SAIC announced a set of administrative measures for online transactions which came into effect on March 15, 2014. Legislation regarding e-commerce, however, has yet to come into legal existence.
“Behind the absence of the e-commerce law lie concerns that the lawmaking might put restraints on the e-commerce arena,” Zhang Zhouping, a senior analyst at China E-Commerce Research Center, told the Global Times on Monday.
But the effective regulation of the e-commerce space which has contributed to the economy’s rebalancing but has caused problems such as sales of counterfeit goods has increasingly become an issue, the analyst said, estimating that the e-commerce law is likely to be introduced in the second half of the year.
Addressing the problem of fake goods, Zhang at SAIC stated that while the problem also exists in off-line sales, it has appeared to be a particular concern for the fast-growing online shopping.
In 2014, online sales of consumer goods soared 49.7 percent from the year before, accounting for 10.63 percent of the total retail sales of social consumer goods last year, data from the National Bureau of Statistics showed. The growth rate of online sales also greatly outperformed a rise of 10.9 percent year-on-year in the total retail sales in 2014.
The cost of breaking the regulations is still too low, Zhang at SAIC remarked, noting that if the cost is hiked to an extent that makes violating enterprises unable to afford the penalties for selling fake products, knockoffs will gradually disappear in the market.
He also urged third-party e-commerce platforms to be responsible for regulating merchants on the platforms.
An accountability mechanism should be established across the e-commerce sector that forces e-commerce platform operators to take responsibility for online shopping fraud, according to Zhang Jindong, chairman of household appliance retailer Suning Commerce Group Co.
Zhang Jindong, also a member of the National Committee of the Chinese People’s Political Consultative Conference, has already submitted the proposal concerning the creation of the accountability mechanism to the country’s top political advisory body, a manager at Suning who declined to be named told the Global Times on Monday.
Also at Monday’s news conference, SAIC, an antitrust regulator, revealed that it has conducted a total of 47 anti-monopoly probes, with 21 having been completed. (People’s Daily, Global Times)