China: consumer goods standards and quality. Full transcript of the State Council policy briefing on Aug 26

 GOVCN. Hu Kaihong (host): Ladies and gentlemen, good afternoon. Welcome to the policy briefing of the State Council. The executive meeting of the State Council held on Aug 24 deliberated and passed a new guideline on improving consumer goods standards and quality. Today, we have invited Mr. Tian Shihong, head of the Standardization Administration of China, to introduce related situations and exchange opinions with you about issues concerning consumer goods standards and quality.

Let’s give the floor to Mr. Tian.

Tian Shihong:

Ladies and gentlemen, and friends from the press, good afternoon. First of all, please allow me to extend our appreciation to your long-term support of China’s work on standardization and quality. The executive meeting of the State Council held on Aug 24 deliberated and passed a new guideline on improving consumer goods standards and quality, which will be issued and distributed to the general public soon.

Consumer goods quality affects people’s livelihood, consumption growth, and improvement of quality and performance of our economy. As an important task to accelerate building a strong nation in quality manufacturing, improvement of consumer goods quality through leading standards will help upgrade the equipment manufacturing industry, enhance people’s livelihood, expand domestic demand, and promote import and export. The Central Committee of the Communist Party of China and the State Council have attached great importance to consumer goods quality. President Xi Jinping pointed out that quality and cost performance are exerting rising influence on consumer goods. We should stimulate consumption by improving supply quality, and transform from made in China to created in China, from China speed to China quality, and from Chinese products to Chinese brands. Premier Li Keqiang has emphasized consumer goods standards and quality on many occasions. He urged that we should align with advanced international standards to bring quality and safety standards up to international levels, and enhance standardization and consumer goods quality to raise people’s confidence in and recognition of Chinese products and brands, allowing consumption to play a key role in economic development and industry transformation.

In recent years, China is speeding up efforts to improve consumer goods standards and quality with nearly 6,000 recorded national or industry standards. A quality system of consumer goods is taking shape, and 80 percent of standards in home appliances, textiles, furniture, toys, and footwear have been recognized as international standards. During the 12th Five-Year Plan, the qualification rate of consumer goods in national random inspections increased by 1.8 percent. However, consumer goods standards and quality still fall behind people’s growing needs, and there is plenty of room to improve in supply structure of consumer goods, brand competitiveness, consumption environment, and consumer trust. Under such circumstances, the General Administration of Quality Supervision, Inspection and Quarantine, the Ministry of Industry and Information Technology and other related departments have drafted a new guideline on improving consumer goods standards and quality (2016-2020) in line with instructions from Premier Li and the executive meeting held on April 6, 2016.

Tian Shihong:

The new guideline adheres to the principles of market orientation, reform and innovation, and openness and integration, emphasizing using advanced standards to enhance quality in the consumer goods sector and upgrading equipment manufacturing, in a bid to push Chinese manufacturing forward to medium- and high-end levels, expand effective supply, improve consumption environment, and make innovations in system and mechanism.

The guideline puts forward qualitative and quantitative objectives to be achieved by 2020. Qualitative objectives include reaching a basic balance between supply and increasing consumption needs, improving quality of consumer goods in key areas to advanced international levels, encouraging enterprises to enhance quality improvement, and significantly increasing the brand value of well-known consumer goods. Meanwhile, there are three quantitative goals, where 95 percent of consumer goods in key areas must meet international standards, pass rate of national spot checks should be kept above 90 percent, and quality competitiveness index of consumer goods should reach at least 84.

Eight main tasks were put forward in the guideline. First, reform the standard supply system to enable the simultaneous development of separate standards set by the government and the market. Second, optimize the standards supply structure in a bid to meet the demand of upgrading consumption structure. Third, urge enterprises to undertake major responsibilities, and stimulate their initiative to boost quality. Fourth, reinforce quality foundation in the consumer goods industry, and enhance related technological innovation. Fifth, enhance brand building. Sixth, improve market environment to vitalize consumption. Seventh, innovate the model of quality control and security supervision. Eighth, improve the quality of consumer goods in import and export.

Seven major projects are set up according to the guideline. The first project is to transform domestic standards into international ones, carrying out comparisons and verifications of key indicators among domestic, international and export standards. Second, publish and oversee self-declared standards developed by consumer goods enterprises. Third, provide one-stop services for technological bases of consumer goods. Fourth, cultivate the best brands of Chinese consumer goods, encouraging enterprises to set up brand innovation centers and enhance their brand awareness and loyalties. Fifth, establish a public platform to provide information on consumer goods quality in various sectors, including standards, measurements, verifications and examinations. Sixth, set up a quality and security management system to avoid, warn and solve any risks as early as possible. Seventh, enhance consumer goods quality in import and export, promoting the overseas image of made-in-China consumer goods.

Tian Shihong:

The plan focuses on key consumption fields with major quality problems and high consumption demands as well as average consumer goods. It also emphasizes the work to promote quality standards of domestic appliances, electronics, household accessories, clothes, goods for babies, women, the elderly and disabled, cosmetics, leisure products, traditional cultural products and food. It will in turn reinforce brand building through a virtuous circle where a better standard-setting procedure is driven by innovation, quality improvement is stimulated by standard-setting, and brand building is upgraded by improved quality.

Measures are also to be carried out to ensure proper implementation of the plan. The measures will include efforts to strengthen laws and regulations, enhance fiscal and tax policy support while attaching importance to personnel training, proper guidance of public opinion and coordination between departments. Meanwhile, local governments should establish an effective awards and punishment system and include the standard and quality of consumer goods in the government’s evaluation to ensure that every policy and measure is being effectively carried out.

Thank you.

Hu Kaihong (host):

Mr. Tian, thank you for your introduction. And let’s move on to questions.

China Daily:

The government has been putting great efforts into delegating power and streamlining administration, strengthening regulations, and improving services since taking office three years ago. So, does the plan include any innovative and reform-related measures in terms of improving standards and quality of consumer goods?

Tian Shihong:

As you said, the government has been working on administrative reform, so the plan follows the reform’s spirit and specifically detailed tasks for governments required in improving the standard and quality of consumer goods. We are aware of the relationship between the government and the market playing a key role in allocating resources and upgrading government function. And how the government will play its role clearly is crucial to the transformation of government function. Under the State Council’s instructions, we designed some systematic and mechanism innovation in the plan considering the work in improving consumer goods’ quality and standard, which are highly marketized, innovative, and closely related to people’s daily life and health. In total, there are seven innovative measures, which I will now introduce to you.

First, adjust domestic quality standards to international ones. We have studied the standards of China’s major trade partners and the nations along the “Belt and Road”, and learned about the advanced standardized management of other countries. We plan to unify the quality standards of products sold in the domestic market and for export.

Second, we will urge enterprises to open their product and service standards to the public. An information platform will be set up in order to encourage public supervision. Meanwhile, the government will invite a third party to rank corporate standards, so that enterprises will be encouraged to set up higher standards for their products and services and that ordinary citizens can know about their product quality.

Third, a negative list for consumer products have been made up. Some market controls of consumer products will be canceled except for compulsory standards and controls based on laws, such as License of Industrial Products and China Compulsory Certification.

Fourth, a universal selective examination system will be set up. We will randomly select the enterprises and products for examination, and the testing agency. The results will be recognized by all departments and regions. Once an enterprise or a product passes examination, it will not be examined again for six months. The system will lift some burdens off Chinese enterprises.

Fifth, set up a mechanism so that the testing agency can be held accountable for its results. Responsibility of quality problems at enterprises should be shared by the testing agency that passed them.

Sixth, improve the supervision system of consumer goods quality. Protection of consumers’ legal rights will be strengthened. A regular mechanism to recall defective products and to set traceability for product quality will be set up.

And last, launch a one-stop service program of National Quality Infrastructure (NQI) on consumer goods. We know that NQI is an institutional framework shared by the international community that establishes and implements standardization for enterprises, including conformity assessment services, metrology, and accreditation. The government will integrate the internet with all the ingredients in the framework and set up a whole-chain service solution for enterprises and industries.

These are some measures that the government will take to improve the quality standards of consumer goods and to better serve enterprises. Thank you.

China Central Television:

Enterprises are the main players in standardization and quality. In order to better exert the functions of enterprises in this area, increase the quality of their products and services, will there be any encouraging policies for enterprises in the plan? Thank you.

Tian Shihong:

Thanks. Indeed, enterprises are the main players in standardization and quality, and they should take a major role in improving standards and quality. During the draft process for the plan, we focused on how to guide and encourage enterprises to meet market demands and motivate them to improve standardization and quality, and also designed some detailed measures. There are several aspects:

First is to speed up cultivating standardized innovation-driven enterprises. What is a standardized innovation-driven enterprise? It refers to enterprises that can quickly transfer or apply the science and technology findings by standardized activities and have some competitive advantages in certain fields. These enterprises can work out and implement advanced standards to increase their market competitiveness with standardized innovation. We will provide products and services that meet the demands of customers by recognizing a batch of standardized innovation-driven enterprises, releasing some support policies, creating a good business environment and boosting their fast development.

Second is to explore setting up a credit investigation system of standardized innovation for fundraising. I will give a brief introduction to the standardized credit investigation on fundraising. It means that during the fundraising process, enterprises should work out and revise standards to show their innovation, credits and social responsibilities. As an invisible asset, enterprises’ standardization abilities will be part of the standards to assess their credit for banks. The plan also clearly proposed setting up such a system. And the system can promote the cooperative innovation model of “Standardization plus Finance,” helping enterprises increase their credit and solve their fundraising problems to some extent, especially high-tech enterprises without many assets and mortgages, such as innovation-driven middle and small-sized enterprises in the scientific and technological field, thus linking the advantages of enterprises with high standardization abilities with financial institutions.

Third is to set up a leading system of enterprises’ standardization according to the plan. As I said just now, the leading system is to bring vigor to enterprises’ standardization. On the one hand, we should push enterprises to publicize their standardization work and supervision system, which helps increase transparency of enterprise standardized information. On the other hand, we also encourage third-party institutions to evaluate the public standards of enterprises and work out and release ranking of results to better help consumers choose products and meet the market demands for information about the quality standards of products.

Fourth is to strengthen talent cultivation. The plan paid great attention to the development of vocational technology talent. Surrounding the cultivation of quality talent and the development of vocational talent, the plan proposed several measures. First, it urged efforts to promote the entrepreneurship and craftsmanship spirit by creating leading examples of craftsmen in China to create an environment of highlighting technology and promoting quality, and efforts to establish and perfect the salary and honor system to promote the entrepreneurship and craftsmanship spirit.

Second, strengthen professional education on quality and standardization and foster vocational technical workers in various sectors. Activities such as vocational skills competition should be held to encourage employees to learn new skills, technology and work methods, in a bid to accelerate the cultivation of high-quality and innovative technical personnel.

Third, improve the quality of all employees. That includes establishing a dual technical talent cultivation mechanism between schools and enterprises, strengthening training for management personnel and front-line workers at enterprises, and exploring training mechanisms for technical personnel between enterprises, universities and vocational schools, to meet market demands and enterprises’ needs. Also, modern apprenticeships should be established between schools and enterprises.

Fourth, improve incentives in income distribution. Efforts should be made to improve the well-being of skilled personnel, encourage ordinary workers to turn themselves into skilled talent.

Fifth, increase efforts to attract foreign professional talent in the fields of standards, measuring, testing, certification and accreditation, and strengthen international talent exchanges and foster a group of high-quality talent in standardization and quality.

The guideline also mentioned incentives and support policies in terms of finance and taxation. It urged combining existing funding channels with encouraging social capital to set up special funds for the improvement of consumer product standards and quality. Key support should be given to standardization of the consumer products sector, and the innovation and application of quality technology.

Meanwhile, it called for guiding social resources to flow to enterprises that have quality and brand advantages, improving the market mechanism for high standards and quality as well as reasonable prices, promoting structural tax cuts and equity incentives policies, and comprehensively implementing the replacement of business tax with VAT to enhance business vitality.

The guideline also explicitly required that government bidding processes should include related standards on technology and quality safety. There are many such incentive measures for enterprises. I introduced five major aspects, but in practice, the guideline includes more content.

China Radio International:

According to the guideline, by 2020, major consumer products sector should meet over 95 percent of international standards. Mr. Tian, could you tell us the current status of our standards in comparison with international standards? And how will the target of 95 percent be met? Thanks you.

Tian Shihong:

The question includes two aspects. First, the current status of standards in our consumer products sector. Second, how to achieve the target.

First, let me introduce the current status of the international benchmarking rate of the industry. In recent years, especially since the reform and opening up, we have been promoting the improvement of China’s standards to meet international standards. We have done plenty of work, mainly in three aspects.

First, we’ve made proactive efforts to adopt international standards. With the development of consumer goods industries, China has become a large consumer goods manufacturing and trading nation. There are abundant and diversified varieties of consumer goods. So how the standards of consumer goods adapt to such development is a challenging work for us, as the standards should not only fit with the domestic market but also comply with the international market. That’s why we keep making efforts to establish China’s consumer goods standards system. We compared China’s standards with international standards and the advanced standards of other countries. According to a statistical analysis, the transformation rate of domestic standards to international standards exceeded 80 percent in major industries, such as household appliances, lighting electrical appliances, textiles, garments, furniture, toys, shoes, clocks and watches, paper products, and washing products. The international standards we talk about here include the standards stipulated by the International Standardization Organization (ISO) and International Electrotechnical Commission (IEC).

Second, we actively carried out comparative analysis between international and domestic standards. Since October 2014, coordinated with related departments and local governments, China’s Standardization Administration has carried out special projects on safety standards of consumer goods. One of the projects is to start the first comparative analysis between international and domestic standards on 12 major sectors involving more than 770 international or domestic technology regulations and standards and more than 3,800 technology indexes. This is a complex technology process as the standards involve many technology indexes. In terms of the 3,800 technology indexes, about 3,000 safety indexes in China are consistent with international standards, accounting for nearly 79 percent of total standards in our study. Standards of some safety indexes are even higher than international counterparts, such as the standards for electric water heaters, electric pressure cookers, soybean milk machines, and some paper products. Furthermore, in traditional sectors such as the fireworks industry, to some extent, China’s standards are leading international standards, and our standards are higher than international ones.

Tian Shihong:

In addition, we also encourage China’s enterprises and technology experts to participate in international standardization efforts. Approved by the State Council, we will host the ISO general assembly from Sept 10 to 14 this year. The assembly will be presented by 163 representatives of ISO members and more than 700 foreign participants. So we hope media friends can also pay close attention to the meeting. We want to take the ISO general assembly as an opportunity to involve Chinese enterprises and experts in international standardization activities.

In fields such as textile and clothing, home appliances, shoemaking, and clock and watch making, China holds 10 posts as president, vice-president or other positions at standardization technical agencies under ISO (International Standardization Organization) and IEC (International Electrotechnical Commission). These two international organizations would set up professional committees to create international standards in a particular field. Meanwhile, we are also promoting research on international standards in new technology such as home service robots and safety concerning traditional industries like textile, shoes and toys.

There are things we need to learn from other countries. For example, safety of chemicals. Many other countries mainly use technology regulations, which focus on general technology requirements, while we pay more attention to chemical safety in specific products. Standards of chemical safety concerning various fields and the whole industrial chain require large amounts of research and development investments, but we still focus on single products. This is our difference from other countries.

Hu Kaihong:

That’s all for today’s policy briefing.

Tian Shihong:

Thank you, Mr. Hu, and thank you, friends from the press. Hope you can pay more attention to our ISO meetings. If you need related information and cooperation, please contact us. Thanks.

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