China's State Administration for Industry and Commerce issued a circular on April 18, 1998 banning all forms of multi-level direct marketing, citing concerns with social stability and economic order. While the direct marketing ban was ultimately implemented in such a way as to allow those who engaged in network marketing to transition to retail sales, alleviating some of the violence of the protest to the ban, opposition to the ban has continued both domestically and abroad. Direct marketing organizations create tight-knit, extensive networks of individuals with similar economic interests. By assembling around a common economic interest, the group may also emerge as a self-motivated political force, particularly when personal economic interests are tested. This latent risk of political activism poses a threat to the authoritarian regime in China. The state's response in issuing a blanket ban of all direct marketing activity illustrates its apprehension of private social and economic networks, and its inability and reluctance to seek regulatory alternatives. As China's economic system continues to evolve under the post-1978 market reform policy, the administration will need to adapt its political approach in order to better understand and respond to the demands of a population with expanding private interests, as well as a growing desire to pursue and protect those interests.
Michele A. Wong,
China's Direct Marketing Ban: A Case Study of China's Response to Capital-Based Social Networks,
11 Pac. Rim L & Pol'y J.
Available at: https://digitalcommons.law.uw.edu/wilj/vol11/iss1/8