Zhang Mao, director of the State Administration for Market Regulation has announced that famous brands and popular trademarks previously awarded by the Chinese government will be cancelled, starting from this year.

This is because the practice implies that the government has endorsed certain enterprises and will be deemed responsible when the enterprise fails to fulfill its social responsibility or encounters a crisis. One such example is the case of San Lu milk powder which was found to be tainted with melamine.

The director also announced that the government will be introducing a “black list” of enterprises through its enterprise public credibility system. Companies found to have flouted the rules will have their business operations restricted throughout the country.

The popularity and influence of a brand originates from consumer trust and market choice. Thus, using the name of the country to endorse the brand is in violation of the law as it can mislead consumers on the quality and utility of certain products and result in unfair competition. The phrase “national brand” is also banned from use in advertisements.

President Xi Jinping has also emphasized that advertisements should not be used to mislead customers. The media, which has significant influence should operate within the laws and put an emphasis on social benefit, in order to realize both social and economic benefits. (Source: ChinaKnowledge)

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