On 17 December 2012 the Chinese Ministry of Commerce
("MOFCOM") promulgated the Guiding Opinions on Promoting
Brand Consumption in China (the "Opinions"). The Opinions
are not particularly interesting for what they do but for what they
signal as to MOFCOM's attitude towards brands, and in
particular the importance placed upon the building and developing
of Chinese brands.
The main concepts embodied in the Opinions are as follows:
It is clear on a number of fronts, that the Chinese authorities
are not content with China being relegated to producing for foreign
brand owners or for producing no-name brand products.
Proper branding results in higher sales at higher prices. The
Opinions reflect that MOFCOM considers the cultivation of Chinese
brands, and also the encouragement of international brands within
China, as an important piece in their strategy to develop
Sino-foreign trade and international economic cooperation to a
MOFCOM recognizes that, to date, Chinese brands have failed to
compete with their Western counterparts. The "brand gap"
exists for a number of reasons including a relatively late start
for Chinese manufacturers and being poor at promotion.
MOFCOM has directed Chinese commerce departments at all levels
to understand, from a strategic perspective, the importance and
urgency of developing and cultivating Chinese brands.
We are in this Together
MOFCOM's Opinion outlines a number of ways in which
entrepreneurs and enterprises need to work together with the
authorities to build an environment conducive for brands to develop
and flourish in China.
The Role of the State
The authorities see themselves as having the following role:
Improving legal protection for brands (including cross
department law enforcement)
Establishing a secure on-line platform where vendors and
consumers alike are confident to trade
Encouraging the consumption of branded products in China
Encouraging basic research on branding
Compiling Chinese brand development reports and indexes so as
to gradually establish and develop a sustainable information
service platform for China in relation to both domestic and foreign
Encouraging Chinese enterprises to seek assistance from trade
associations and intermediaries so as to gain a professional
understanding of brands
ncouraging Chinese enterprises to acquire foreign brands and
State Encouragement but Market Rule
However, the market is also seen as playing a vital role. The
Opinions do stress that policy should be market orientated and,
indeed, even foresee that greater success by foreign brands in
China will lead to benefits in the long term development of China
brands and Chinese consumers. Consumers should benefit from a
greater range of products as well as prices which converge (i.e.
gap in pricing between domestic and foreign products should be
reduced). Chinese companies will be encouraged to engage in
collective displays and have a concentrated promotion of Chinese
brands from a number of perspectives.
MOFCOM also recognizes that companies, not governments, create
brands and stresses that innovation should be fostered in respect
of brand creation and development.
As stated at the outset, the Opinions do very little in and of
themselves. Rather, their importance is serving as a guide to
MOFCOM's attitude towards the next stage of China's
Reading between the lines, it seems clear that MOFCOM is keen to
encourage Chinese enterprises to build and develop brands which can
be winners both at home and internationally. The authorities also
seem to realize that this cannot be achieved without a strong
market at home and consumers that are brand conscious. In this
regard, foreign brand owners will also benefit from a more
welcoming market, secure online platforms and better enforcement
and protection of their rights.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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