BAIC cracks down on sub-par goods

International companies should increase their respect for the Chinese market as authorities begin to punish those who do business with a double standard in China, analysts told the Global Times Thursday, after Nike was fined 4.87 million yuan ($780,000) for cheating Chinese consumers.

Nike, the leading US sportswear producer, was the first foreign company to be fined for treating Chinese consumers with a double standard, according to the Beijing Administration for Industry and Commerce (BAIC).

One of Nike's high-end sneakers, the Nike Zoom Hyperdunk 2011 basketball shoe, is advertised in China and abroad as having midsoles with two Zoom Air cushions. But the shoes sold in the Chinese market have only one Zoom Air cushion despite being priced at 1,299 yuan, 500 yuan higher than abroad, according to an announcement posted on BAIC's website Wednesday.

Although Nike pledged to refund the consumers concerned, the administration still decided to charge the company 4.87 million yuan, given that Chinese consumers were treated with a "double standard", which "shall not be tolerated," said the announcement.

Neither Nike nor BAIC could be reached for comments by press time.

According to China's Consumer Protection Law, Nike should pay one to five times the selling price in fines, and the consumers could be compensated with twice the selling price, according to Qiu Baochang, president of the legal panel at China Consumers' Association.

"This punishment is a wake-up call to foreign companies in China. They should enhance their credibility when doing business in China, as the local governments and Chinese consumers are paying more and more attention to consumer rights protection," Zhang Qing, CEO of Beijing Key-solution Sports Consulting Co, told the Global Times Thursday.

However, Nike's fame in China will not be greatly damaged, said Zhang. "Nike still holds the major Chinese market, with adidas coming in second."

"I will continue to buy Nike's products, given that their quality is much better than domestic brands like Li Ning and Anta. But I will protect my rights and double-check whether I got the same shoes described in the advertisement," a Beijing consumer, surnamed Ma, told the Global Times.

"Consumers' increasing awareness of their rights will help the government to regulate companies. The regulations and punishments, which are expected to grow more severe, will be put into full effect in the Chinese market which is often treated with a double standard by overseas companies," Qiu said.

For instance, Toyota's 2011 global recall of 1.7 million problematic cars did not include the Chinese market, and Johnson & Johnson has made 25 recalls around the world since 2009 which seldom involved China, the Beijing Evening News reported Wednesday.

Qiu also noted that the government's quality standards are expected to be brought into line with international standards, which will enhance the quality of domestic products.