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Protecting farmers from callous frauds

By Liu Shinan (China Daily)
Updated: 2009-04-01 07:55

To boost commercial consumption in rural areas during the economic slowdown, the central government is encouraging makers of home appliances to promote sales of their products in the countryside.

Under it, the government subsidizes 13 percent of the retail price of much needed household items for rural buyers.

Farmers have welcomed the scheme, which translates as "home appliances going to the countryside", and early indications point to its success.

At a press conference held during the annual session of the National People's Congress last month, Li Yizhong, minister of industry and information science, said the project had spurred business for makers of electronic products, home appliances, steel and chemical products.

But frauds always emerge as a fly in the ointment.

To date, they have falsely sold fake TV sets, washing machines, refrigerators and air-conditioners to farmers in the name of the scheme.

These electrical appliances have been revamped from used machines collected in cities as garbage.

Dodgy manufacturers have used second-hand machines' circuitry and replaced the shell with a fresh one to make the product appear new.

And the logos they use look very much like famous brands.

For example, some fakes have been branded TGL to look like TCL, a famous TV brand.

These fakes are sold at low prices but profits are still sizeable given the extremely low costs.

As core components of the machines are seriously worn after years of use, hazards lurk inside these shoddy commodities. They can cause fire, injury or death.

Producers of these fake home appliances are not necessarily illegal enterprises.

The fact they are sold in regular shops in tandem with genuine brands indicate these companies are also legally registered.

The problem lies in how they passed quality examinations to be granted a license to be sold in exclusive shops for the government subsidy scheme.

Solutions lie with local authorities.

Manufacturers of shoddy and fake products are mostly small companies that contribute significantly to local revenues. This contribution is very important to the growth of the local economy, which matters greatly to officials' work performance.

The officials also attach great importance to the companies' employment of local workers.

Criteria to gauge local officials' administrative performances are divided into two categories - the so-called "hard" ones, such as economic development; and the "soft" ones, such as environment protection.

The first category is called "hard" because they are more tangible and instantly effective; the second group is "soft" because they need longer to manifest, usually longer than a local leader's tenure.

Gross domestic product (GDP) growth and employment are the two major hard indices. Local officials tend to give most of their concerns to these two indices. That explains why they favor local industrial enterprises and tend to protect them.

In the case of farmers being cheated with fake home appliances, local governments should not limit the punishment to mere financial penalties but should rather revoke licenses in the event of violations. For these counterfeit producers should be eradicated to protect farmers' consumer rights.

Only by eliminating such frauds can a healthy and favorable environment for development emerge.

And this will be a real boost to the local economy.

E-mail: liushinan@chinadaily.com.cn