Wu Guangqiang

Dian da qi ke is a Chinese expression meaning that big businesses often get away with mistreating customers. Sadly, even now that China has become a highly developed economy, such bullying is still common.

The latest instance is the brawl between Taobao Mall.com (Tmall), China's largest business-to-consumer (B2C) online marketplace, and tens of thousands of small online vendors. The spat broke out when Tmall announced Oct. 10 a significant rise in the commission rate and premium fees it charged all online shops. Depending on the category of goods, sellers on Tmall will have to pay either a 30,000 yuan (US$4,710) or 60,000 yuan "technology service fee". The previous agreement had set the annual fee for all sellers at 6,000 yuan. The new policy was seen as Tmall's new strategy to move from the low-end market to the high-end market, but it will actually drive many small players out of business.

The abrupt hike enraged small merchants, and in what they called "an uprising", they retaliated by attacking big sellers in various ways, such as deliberately placing massive online orders before canceling them immediately after payment, and leaving countless negative comments in an attempt to lower their customer satisfaction ratings.

Despite Tmall's initial tough stance, under public pressure and with the intervention of the Ministry of Commerce, which called on Tmall to "respond to reasonable requests from small and medium sized businesses," Tmall seemed willing to meet halfway by announcing Oct. 17 five measures aimed at winning the support of online merchants. The first condition was that Tmall would delay the implementation of the new policies for existing merchants until Sept. 30 2012. For new participants, the rules come into effect Jan. 1, 2012.

While the result remains to be seen, damages have been done to Tmall and its founder Jack Ma, who has long been hailed as a creator of opportunities for small-and-medium-sized vendors and an ardent advocate of business ethics. Jack Ma has acquired hubris after obtaining a monopoly position as did most business giants.

Strangely, after doing business in China, some multinationals that are law-abiding in their own homeland begin wallowing in the mire with dishonest local contacts.

Early this month, seven Walmart stores in Chongqing were ordered to halt operations and a number of salespersons were detained after being discovered to have sold large quantities of regular pork products as organic.

Walmart and Carrefour are both leading global retailers and enjoy a good reputation, but in China they have frequently been caught tampering with deadline dates and prices of commodities. Early this year, Kumho Tire, a Korean tires manufacturer and one of the largest tire suppliers in China, was involved in a quality scandal. It used excessive amounts of recycled rubber as raw materials at its Tianjin factory, greatly diminishing its safety guarantee. Ajisen Ramen (China), the sole franchisee of Japan's Ajisen-branded restaurant chain on the Chinese mainland and in Hong Kong, was accused of making their broths using soup concentrate and cheap flavoring powder instead of "a broth of pork bones simmered to perfection," which they had boasted of.

 The list of scandals involving foreign businesses also includes Otis, one of the world's leading elevator producer, and Ikea, a Swedish furnish supplier.

It is unwise to think Dian da qi ke is simply an ill of ancient Chinese society. Though it is an old expression, business ethics was not as bad in old times in China as it is nowadays. Cheating is universal, but Chinese businessmen were constantly cautioned not to cheat anyone, neither the old nor the young. Honesty and conformity were at the heart of Confucianism.

Nevertheless, since China adopted a pro-mercantilism policy in the early 1980s, the society has made a double mistake: an excessive promotion of making money plus lax regulation of business activities.

In the absence of rigid regulation and punishment for offenders, the dishonest are encouraged and the honest go bad. So, business ethics only prospers where it is practiced, not just preached.

    (The author is an English tutor and a freelance writer. He can be reached at jw368@163.com.)