Exemptions from fines improve business environment in Shanghai

More than 600 minor market violations by enterprises have been exempt from administrative penalties in Shanghai amid the city's efforts to foster a more vibrant business environment, especially for innovative enterprises and those involving new business models.

The exemption was based on a list of 34 minor violations that would be freed from penalties in the city, which has been improving its business environment, Lu Weidong, director of the Shanghai Municipal Bureau of Justice, said at a forum focusing on optimizing the business environment through legal approaches in Shanghai on Friday.

The list, the country's first of its kind in a provincial-level region, included violations in marketing, quality and food safety as well as fire control that do not cause consequences and that the company has taken the initiative to rectify.

A trading company based in Minhang district was found to use the phrase "the latest patent", which is banned by the country's advertising law, when introducing its products on e-commerce platforms JD and Alibaba. The company was facing a maximum penalty of 100,000 yuan ($14,000) according to the law.

The bureau said that the company was finally exempt from penalty as it showed proof to the market watchdog that it had applied for a patent, didn't mean to mislead consumers, and took the initiative to alter the wording of its advertisement.

"It was not only about monetary fines. More importantly, our company would have been put on a credit blacklist and our further development would be influenced if we received a penalty," said the company founder, who preferred to remain anonymous.

"We aim to gather efforts from various government departments to focus on systematic improvements of relevant policies and rules and facilitate effective communication between the government and the market," said Luo Peixin, deputy director of the Shanghai Municipal Bureau of Justice.

An annual ranking released by Hurun Research Institute in October showed that China had the largest number of startups valued at more than $1 billion this year.

"Such figures prove that the China experience and notable progress in improving business climate have been recognized by the international community," said Liu Zhenyu, vice-minister of justice.