User:Jsfeng/Wang Hai(Consumer Activist)

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Wang Hai(Chinese: 王海; born 1973) is a consumer activist in China. He is also known as the "Anti-Counterfeiting Hero", and is famous for starting the "Wang Hai Consumer Protection Hotline" and wearing recognizable Rayban sunglasses as to prevent shopkeepers from recognizing him when he shops. Wang Hai has also written several books such as "Learn to Protect Your Property Rights in a Day" and "I am a rogue". He is currently with the Psychological Affairs Department of Harmonious Community Development, the head of Wang Hai Consumer Rights Protection Project Hotline, and the general manager of Beijing Dahai Business Consulting Co,. Ltd.

Biography
Wang Hai was born in the seaport of Qindao within the ShanDong province in 1973. He dropped out of high school at 16 to work as a representative for his father's picture-frame factory. Later on, he became the Beijing representative for a Shanghai light-fixture company. In 1993, he invested all of his and his family's savings into a restaurant. This investment failed and he lost around $25000. He stumbled upon a little known clause in a newly passed Consumer Right's Protection Law when he was barely in his 20s. Initially, he did not believe it would work and he tested it out by buying twelve pairs of Sony headphones that appeared fake. His first refund earned him $26, and over the course of two years from that point, he has received $13000 in compensation. Wang Hai's current assets from counterfeit exposing exceed ten million renmibi. (9)

People tend to think that he owns a big house and drives a Mercedes according to popular myth. In reality, Wang Hai lives in a rented apartment in Beijing and does not drive a car. (7)

In 1995, Wang Hai became the winner of the Consumer Anti-Counterfeiting award which was established by the China Consumer Protection Foundation. Wang Hai became a popular household name in China when he appeared on the popular talk show, "Tell it like it is" in 1996. There he was dubbed a "pragmatic patriot." He also met with president Bill Clinton in 1998, and was called the "protector of Chinese Consumers" by president Clinton. The first time Wang Hai took off his rayban sunglasses in public was during a television appearance in 1999. He later became a regular host of the Chinese Television program, "Weekly Events." In 2000, the Dahai Business Consulting Co,. Ltd. led by Wang Hai was listed within the New Weekly list of emerging companies. (9)

Modus Operandi
In 1994, China passed a consumer protection law which included Clause 49, which says that business operators found to have committed fraud in providing goods or services must compensate the consumer with a sum double the amount paid. Wang Hai's first operation occurred when he was shopping with his cousin for headphones. He was suspicious of the "Sony" headphones that his cousin selected, bought two pairs and spent the next few weeks examining them with various government agencies. When the Technology Inspection Bureau confirmed his hunch, Wang Hai purchased another 10 headphones and demanded a refund. Eight months later, he received his compensation, a total value of $26. (2)

He now runs a company, Beijing Dahai Commercial Consulting Company with 200 informants and 10 employees in 1998, including a lawyer to sue companies that do not offer refunds. Informers are paid for each tip they report and the company takes a portion of the refunded money obtained. He operates with the same technique as he first discovered, buying counterfeit goods in bulk, and demanding double refunds. Notable operations include exposures of around 200 stores selling counterfeit mobile phones and licenses and a bust on state owned drug stores that were selling an antibiotic tablet carrying the Chinese logo of Pharmacia and Upjohn.

Wang Hai says that he is not against street hawkers who sell obvious counterfeit goods at a large discount, but rather upscale stores that try to pass counterfeit goods as real brand name items. (7)

He has setup a national hotline aided by funding from George Washington University that helps callers sue and get their money back or investigate questionable companies that are reported.

Wang Hai Phenomenon
In the beginning of Wang Hai's consumer advocacy career, his activism won the tacit approval of the government and was hailed as the new model of the Chinese citizen. He was shown as a clear example of China's willingness and commitment to protecting intellectual property rights at a time when China's entrance to the World Trade Organization was still under debate. In addition, Wang Hai and many other similar activists were seen by the government as helping to developing the small non governmental organization sector and reducing the burden upon the state to provide services and support to consumer citizens.

The Wang Hai phenomenon was a popular movement in which many Chinese citizens followed Wang Hai's modus operandi and scoured markets seeking violations of consumer rights, specifically defective and false products. This movement stemmed from the celebrity status that Wang Hai gained through his activism. In the mid 1990s, there were many citizens in China who were testing the waters with new laws and how the government would enforce theme. Wang Hai was merely one of the multitude, however he gained the support of certain officials who wanted to promote individual action in regards with consumer rights and protection. He Shan, a member of the PRC Constitutional Law Working Committee who helped draft the Consumer Protection Law that Wang Hai utilized, supported Wang Hai by personally copying his methods and bringing the first compensation claim to court as to set judicial precedent in court that would go on to resolve Wang Hai's case later(1).

Similarly, Wang Hai's celebrity status was gained when news media seeking entertaining but censorship safe covers called Wang Hai the "Anti-Counterfeit Hero" as well as the "First Citizen of Anti-Counterfeiting." Wang Hai would then serve as the model consumer for official events marking the newly created annual Consumer Rights Day on the 15th of March. He also gave countless interviews and published three autobiographical books. In 1998, CCTV named him one of the twenty most important people of China's reform era. During this period, a single press conference by Wang Hai would threaten to bring down an entire company or product category.(1)

Perhaps the most notable copy cat of Wang Hai is Sun Yinshan. Sun Yinshan purchased fifteen packs of Yutu brand sausages whose quality assurance period had already expired. He then went to customer service to claim compensation, and the damages claimed by Sun Yinshan amounted to ten times the total price of the expired packs of sausages. This became a legal case Guiding Case no. 23, part of the sixth batch of guiding cases released by China's Supreme People's Court. This case serves to answer the question if a person knowingly purchases substandard goods with the sole purpose of returning them to claim compensation, should he be classified as a consumer. The legal basis for Sun Yinshan claim is in Article 96, Paragraph 2 of the Food Safety Law which states that if an entity produces food that does not conform to food safety standards or sells food that does not conform to food safety standards, the consumer can demand the producer or seller pay damages ten times the price of the food. This is extremely similar Wang Hai's utilization of the consumer protection law. Nanjing Auchan Hypermarket Co,. Ltd. Jiangning Store argued in defense that by purchasing the food with the intent to refund and claim damages put Sun Yinshan outside the definition of consumer. Guiding Case no. 23 was ruled in favor of Sun Yinshan with the reasoning being that the concept of consumer is relative to both the seller and the producer. As long as the product was purchased and used, or the service received was for the purpose of meeting the needs of individual and family life rather than meeting the needs of production or business, then the buyer should be recognized as a consumer(5). The general reasoning behind this court resolution can be said to state that the burden of proof to show that a person seeking claims is not a consumer lies upon the defendant, and that the Nanjing Auchan Hypermarket were unable to provide sufficient evidence that Sun Yinshan purchased goods specifically to claim damages.

Controversies
Some controversies about Wang Hai's modus operandi have arisen, including his motives and whether or not he is abusing Clause 49 through the definition of a consumer. When he rose to prominence in the mid 1990s, he was initially hailed as a hero, championing consumer rights in china against suppliers of clearly fake and defective products. In the 2000s, as Wang Hai became ever more famous, he became accused of merely cashing in on the business of consumer rights. A national television program aired in March 2000 was very critical on both his lifestyle and motives. His critics lead towards article 2 of the consumer protection law. This article defines a consumer as someone "who purchases and uses commodities or receives services for daily consumption." Wang Hai's critics suggest that because the motive behind purchasing these defective products is not for daily consumption and thus he does not belong as a consumer and is ineligible for claims of refund under law. (5)

Defenders of Wang Hai reason that the main purpose of the Consumer Protection Law is to promote consumers' rights and interests. Therefore individual customers should assert their rights, even through private enforcement mechanisms. Thus Wang Hai's activism, regardless of motive, are helpful in meeting the objective of the Consumer Protection Law in increasing the rights of consumers in China(5). This can be seen through how the Chinese government approved of Wang Hai's advocacy career, and the direct aid that He Shan gave to Wang Hai. The resolution of Guiding Case no. 23 in 2012 also shows the support of the Chinese government for the actions of individuals are to be encouraged, even if these individuals are professional consumer activists.

In 2000, the Jincheng Electronic Wire and Cable Manufacturing Company alleged that Wang Hai accepted payments from counterfeit manufacturers and vendors to publicly attack their competitors. They claimed, in essence, that Wang Hai utilized his celebrity status to blackmail businesses for profit, and that Wang Hai was not fighting fakes, but fake fighting. The Jincheng allegations were revealed to be a fake plot, and even had a code name "Overturn Wang" and was masterminded by the Jincheng Electronic Wire and Cable Manufacturing Company to trap Wang(1). This incident displaced the public image of Wang Hai from a folk hero fighting and championing consumer rights to that of a celebrity colluding with media for personal profit.

Effect on Consumerism in China
Wang Hai used his celebrity status as leverage to create new social roles and forms of activism. In 1998, Wang Hai started a for profit consultation firm that would investigate substandard and illegitimate products in the Chinese market. He argued that the firm would professionalize the new role of the "counterfeit detective" and promote corporate behavior within the anti counterfeiting campaign. In an interview, Wang Hai detailed the various domains in which he participated as an activist: individual behavior, corporate behavior, non-governmental organization, political representation, policy participation, media spokesperson, professionalization of anti-counterfeiting, policy participation and more. He divided these into two major categories, individual and social benefit(1). In the period of the reform era, Wang Hai played a large role in the transformation of China into a legal, rights based society. In this period of transformation and emergence of civil society, Wang Hai's participation and promotion of a model consumer aided China in spreading both a legal process to tackle defective and fraudulent products.

Following in Wang Hai's footsteps, many counterfeiting busting companies now roam the streets of China seeking pirated and counterfeit goods. They identify culprits and collect evidence to submit to the Administration for Industry and Commerce to shut the business down(10). In light of this development in anti counterfeiting culture, a new culture of false products emerged. Shanzai as a term was first applied to counterfeit consumer electronics with names that were nearly identical to the brands that they were imitating. Now this term is utilized to describe anything that is unofficial and unregulated. While Shanzai products resemble the name brands that they are imitating, they avoid the eyes of consumer activists such as Wang Hai by clearly indicating themselves as imitations of brand name products rather than being false imitations. These products allow consumers without the expendable money to buy luxury name brands to experience and own similar products(10).

The activism that Wang Hai lead was the driving force behind the developing sector of autonomous non government organizations that try to fulfill the needs of citizens in place of the Chinese government. With Wang Hai's example, many other organizations have emerged in a wide range of activities, from advising women to campaigning for environmental protection(6). In 1999, the Chinese government began a campaign against the Falun Gong, and this has made it particularly difficult for non government organizations to register within China. However, Wang Hai has shown a path in which non government organizations can officiated themselves, by gaining the support of government officials, business, and individuals.