China "consumer Protection Act, Punitive Damages System

The theory of punitive damages is originated from Common Law. It has been one of the disputed questions since it came to exist.In Civil Law, damage compensate plays an dominant role in compensate theory, therefore Civil Law countries have not absorbed punitive damages liability directly. However, it has already appeared in many Civil Law countries. The Article 49 of Protection of Consumers Rights and Interests of our country was thought to be the first attempt to introduce punitive damages liability in our country, later punitive damages liability was confirmed in Contract Law. Punitive damages liability has established the belief of giving consumers substantial protection; therefore, it has its own significance. But punitive damages liability can not maximize its function mainly due to two reasons:First, it came to exist in 1990s and based itself on the social and economic conditions at that time. Second, the regulation of punitive damages liability is not scientific enough and needs to be carefully designed.This article is divided into four parts. First part introduces the social and economic conditions in 1990s when Protection of Consumers Rights and Interests was issued, in which punitive damages liability's insufficiencies rooted. Second part, I analyze how punitive damages liability is regulated in Protection of Consumers Rights and Interests and point out that our punitive damages root in liability of breaking a contract but not liability of tort. Our punitive damages liability can not maximize itself also because of its limitation on the amount of compensations, which are two times the costs that the consumers paid for the commodities purchased or services received. Meanwhile, as consumers are much less professional than business operators in business, consumers can ask for punitive damages when business operators engage in fraudulent activities deliberately. Also, I think we should support the consumers who buy fake while knowing it, and who start lawsuits to get compensations. In the third part, I put forward the proposals on how to perfect our punitive damages system in Protection of Consumers Rights and Interests.