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Opinion

Uphold consumer rights

(China Daily)
Updated: 2011-01-06 15:48
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China's new regulations against price monopolies mark a welcome step forward in the country's efforts to build a consumer society.

However, to unleash the full potential of domestic consumers, Chinese policymakers must do more to strengthen consumer protection against various price monopolies.

On Tuesday, the National Development and Reform Commission, China's top economic planning agency, unveiled detailed regulations on price monopolies, which will enter into force on Feb 1.

It is believed that the new rules will facilitate implementation of China's Anti-Monopoly Law, which was adopted on Aug 30, 2007 and put into effect on Aug 1, 2008.

By specifying anti-competition behavior by businesses, especially the most obviously illegal kinds, such as price-fixing and price-related abuses of dominant market position, the new regulations will not only enable businesses to comply with the law more easily, but also make enforcement more consistent to encourage fair competition.

Sound market order is definitely needed to prevent speculative price hikes that add fuel to soaring inflation in the short term and to boost consumption growth, which is crucial to the transformation of China's growth model in the long run.

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As China's consumer inflation accelerated last year, prices of many products such as garlic and mung beans rocketed through the roof amid rampant hoarding and monopoly activities.

The new regulations, as a part of the government's macro-economic management policies in 2011, will better help administrate the market and prevent excessive price rises.

Such a role in fighting inflation is already enough to justify these new anti-monopoly regulations. But they are of far greater and longer-term importance than that, as the Chinese economy is shifting away from its reliance on investment and export toward more consumer-led growth.

Great expectations have been pinned on Chinese consumers to speed the change of the domestic growth model and help reduce the imbalance of the world economy.

In addition to a substantial increase in their income as a share of the country's gross domestic product, a sound consumption environment, that effectively prohibits any business from abusing its dominant market share at the expense of consumers, is also a must for the rapid growth of China's consumer society.

Chinese policymakers should thus do all they can to make that the main thrust of new anti-trust regulations.

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