Chinese 'Ralph Naders' Won't Take It Anymore

Liu Xin knows that shopping in China can hold hidden dangers.

Before her much-awaited wedding day last October, Ms. Liu went to a department store and bought a new pair of white leather high heels for $20, a hefty sum for the Beijing secretary. But as she arrived for the ceremony and stepped out of the car, the heel on a shoe cracked, sending her sprawling on the sidewalk in her wedding dress.

Humiliated, she demanded compensation from the store under China's beefed-up consumer laws. After some resistance, she was paid just over $100 for her trouble. "I got the compensation I deserved," Liu says proudly about her victory over China's notoriously poor-quality shoe industry.

Amid a decade-long economic boom that has flooded the market with shoddy domestic goods, consumer activism is on the rise in China. Until the mid-1980s, few Chinese dared complain about poor goods and services, fearing persecution. Now, encouraged to stand up for their rights, Chinese consumers are fighting back in growing numbers.

Since 1990, national retail sales have grown an average of 11 percent annually and totaled more than $2 billion last year. The government-run China Consumers' Association reports that the number of complaints handled rose an average of 10 percent yearly and reached almost 450,000 in 1995.

During the first three months of 1996, the association received more than 91,000 complaints that brought consumers more than $6.4 million in compensation. Recently, the consumer watchdog honored a Guangzhou resident who successfully took on a department store for forcing him to undergo a body search and a worker in Qingdao who was burned by an exploding electric heater he bought. Hundreds of Chinese are killed and injured yearly by substandard commodities and products.

China's Communist rulers have encouraged the birth of a consumer movement for political and economic reasons. At a time when the Communist Party wrestles with pervasive corruption, the leadership wants to be seen on the side of the consumer. Consumerism also helps boost the quality of Chinese goods and make them more acceptable and competitive on the world market.

"Consumer consciousness has developed slowly in China," says Yang Ke, an official of the 12-year-old association. "For a long time, Chinese saw themselves not as consumers but only as customers with no rights."

Consumer buying has become a frenzy in China in only a few short years. In the 1960s, an urbanite dreamed of owning a "Flying Pigeon" bicycle or a "Butterfly" brand sewing machine. Today, upwardly mobile families have their sights set on a color TV and a washing machine. Home computer purchases are growing 40 percent annually. Four percent of Chinese surveyed in a recent Gallup study hope to own a car within the next few years.

Most of these glitzy goods are still well beyond means of most Chinese who, by international standards, hardly have any money to spend. In the countryside, where 80 percent live, many still struggle for the basics of living.

In cities, more than 12 million people still fall below the official poverty line. At the other end, 1 million affluent households have an annual income of more than $100,000, according to official figures. In between are 100 million Chinese earning more than $1,000 yearly, the income level at which consumer spending usually takes off and people can afford consumer goods. Their ranks could triple by the turn of the century and exceed the US population.

To satisfy China's increasingly assertive consumers, the government launches periodic campaigns to stop the sale of poor products. To bolster a rather weak consumer rights law that took effect in 1994, officials set out 13 categories of illegal activities and their penalties in March.

Different complaints

"During the 1980s, most of the complaints were about poor quality household appliances," Ms. Yang says. "But [now] more people are unhappy about long delays in installing a telephone or insurance fraud."

Foreign companies find themselves increasingly on the consumer hit list. Although consumers are more discriminating than a decade ago and have more grievances, foreign businessmen are questioning whether specious complaints are being lodged to earn big payoffs.

'Substandard' cola

Last year, Coca-Cola's China subsidiary was publicly accused by a Henan Province soft-drinks wholesaler of selling substandard cola. He demanded more than $2 million in compensation. Coke maintains the cola was good and in turn is suing the wholesaler for hurting its reputation.

"People who see others getting compensation from foreign firms look for ways to get a piece of the action too," a Western businesswoman says.

Consumer association officials say that most of the complaints are valid and maintain that Chinese consumers no longer see imported goods as "superior." The government has been waging a campaign to bolster domestic brands over foreign rivals. "Complaints about false advertisements, quality problems, and incomplete after-sale service are on the rise," says Wu Gaohan, a consumer rights official.