CHINA Law and Practice Contributed by: Yue Dai, Zhenghao Li and Xiaokun Yuan, King & Wood Mallesons
court finds no such violation other than con - sumer fraud, the consumer may change their claim to seek punitive damages for consumer fraud, as per the PCRI. • For buyers who knowingly purchase sub - standard food or repeatedly purchase the same product within a short period, courts may only support their punitive damages claim on the basis of the quantities necessary for household use. Moreover, business opera - tors shall bear the burden of proof if they argue that the buyer knowingly purchased the substandard food. • Courts shall reject punitive damages claims by buyers who fabricate facts and use threats of tip-offs or lawsuits. Such buyers shall also be held liable for acting in bad faith. • Further, the new interpretation also provides guidelines on punitive damages claims result - ing from errors in product labels or manuals. For example, courts may dismiss punitive damages claims due to clerical errors that do not cause misleading effects. Introduction of New Rules to Further Protect Consumer Rights On 15 March 2024, China introduced the Imple - mentation Rules on the Law on the Protection of Consumer Rights and Interests, which came into force on 1 July 2024. The new rules have elaborated on the following aspects concerning product quality. It is also important to note that the SAMR proposed amendments, which are yet to be finalised, to the statutory rules on repair, replacement and return policies of phones, com - puters, household audio-visual products and automotive products in order to reflect the new changes in the implementation rules. Duty to ensure product safety The new rules require business operators to ensure the safety of the products or services
provided, including those offered free of charge in the form of prizes, gifts or samples. Moreo - ver, business operators shall notify consumers if such free products or services have flaws which however do not contravene mandatory rules nor affect their normal performance. Recall of defective products The new rules provide in general the require - ments for recalling defective products. Con - sumers are encouraged to notify the business operators or authorities if they find potential defects in the products or services, and busi - ness operators are required to react promptly when discovering potential defects that could harm physical or property safety. Meanwhile, business operators that sell, lease, or repair the products, suppliers of components and those entrusted with manufacturing are obligated to Under the new rules, the warranty period for return, replacement and repair as agreed between the business operator and the consum - er shall not be shorter than any statutory rules. In general, the warranty period shall start from the date when the product is delivered to the consumer or the service is completed. Where the business operator has performed its replace - ment duty, the warranty period shall be reset, starting from the date of the completion of the replacement. Expansion of the mandate of consumer associations co-operate with product recalls. Calculation of warranty period In addition to responsibilities set out in the PCRI, the new rules accord additional mandate to con - sumer associations. Consumer associations may hold talks with the business operators or industrial organisations on consumer protec - tion issues. They are also mandated to carry
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