A Comparative Study on Consumer Protection Legislation in China and South Korea

Abstract

Ⅰ. Background and Objectives □ In just a few decades, China has transitioned from having no consumer economy to becoming the largest consumer market in the world. China is unique?it is a developing country with a developing legal system, but has a booming economy and a vast number of consumers. It is therefore neither a typical emerging market economy nor an equivalent to a Western industrialized economy. These attributes pose many challenges for the effective implementation of a legal regime for consumer protection. □ Observing the trade volume between China and Korea being escalated yearly and product manufacturing·consuming takes places across border between the two countries daily, examining the law that governs consumers and international business owners is unavoidable. □ This study will examine the chronological development of the consumer protection law in China while placing weight on the product liability law aspect. □ This study will also observe and analyze regulations adopted at the Shanghai court and cases decided, deducing principals on the product liability issues.

Ⅱ. Main Contents □ Overview of Chinese consumer protection law ○ In the 1990s, China put into place a comprehensive legal scheme for addressing consumer disputes; CRIL was the primary law enacted for consumer protection. ○ The PQL, Advertising Law, and the CCL all provide added protection. ○ In addition to these national laws, significant measures can also be found at the provincial and municipal level, as seen on the examples of the Shanghai Regulations for form contracts and for consumer protection. ○ When the national and local regulatory schemes are read and applied together, on their face, they offer significant protections for consumer in many areas. □ Analysis of Shanghai Court’s product liability dispute cases ○ Data from the Shanghai Higher People’s Court indicated that the consumer protection related cases showed a trend that it happened more and more often. With the rise in the number of cases, the rate of mediation withdrawal has a significant increase than five years earlier. ○ The number of the courts that applied the Law of the People’s Republic of China on Product Quality are about three times to the number of the courts that applied the new Tort Liability Law of the People’s Republic of China. Further, in the event cases involved personal injury, the courts preferred to apply the Interpretation of the Supreme People’s Court on Certain Issues concerning Determination of Liability for Compensation for Spiritual Damage Arising from Civil Tort to determine the spiritual damage. ○ The current administrative protection mechanism of consumer rights and interests still have many deficiencies, and protection system need yet to be perfected. ○ The protection mechanism provided by industrial and commercial administrative departments, especially, paid too much attention on the relief after the fact, giving consumers rights to complain and sue after their interests have been infringed. But ex post facto remedies haven’t well protected the interests of consumers. □ Legal resolution on Foreign-related Products Liability-Comparison of Chinese law and Korean law ○ There is a single independent product liability law in Korea while China has not a single one; the provisions can only be found in one chapter of tort law and some separable articles inproduct quality law and others. ○ Punitive damages are awarded for all kinds of product defects in China. Because the laws are so new it is still unclear how Chinese courts will resolve legal issues arising from application of foreign law in actual cases. Punitive damages are not allowed under Korean law nor permitted in product liability claims.

Ⅲ. Expected effects □ Important legal information for foreign business operators to avoid committing any violations of the national/local laws and rules by presenting key issues of the Chinese consumer protection law at the national level along with the recent developments in the local courts with the municipal regulations □ Useful as basic information for international trade and business