Market, not govts, can judge what is a worthy product

“famous trademark”, “reputed trademark” and “well-known trademark” were honorary titles issued by governments at different levels to Chinese products in order to encourage competition and help consumers identify quality products. However, the State Administration for Industry and Commerce says the practice is outdated and it plans to put an end to it. Beijing News comments:

Governments at various levels started bestowing the honorary trademark titles shortly after China bid farewell to its decades long planned economy in the early 1980s as a means to set up role-model manufacturers in certain industries.

But the shortcomings of the practice have become increasingly obvious as China’s market has evolved. That a Stateowned enterprise can more easily obtain such a title than a private company shows the lack of fairness in the evaluation mechanism that originated in an era when most products were manufactured by SOEs. Also, some officials seek illegal gains from the evaluation process for such labels. Once products carrying a government-endorsed trademark label are found to be problematic, the whole system and the government’s image will be damaged.

The food safety crisis triggered by the melamine-contaminated baby formula in 2008 is just a case in point. Many problematic dairy products bore the distinction of being a “famous trademark”, or “inspection-exempted products”, the other kind of honorary title given by the governments.

Moreover, governments now lack the necessary expertise to evaluate some cutting-edge products in today’s market.

The trademark evaluation practice has already fulfilled its historical task. In a developed market economy, consumers have the rights and means to decide the popularity of commodities. Market demand is a more precise appraisal than a government’s evaluation.