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A Chinese lawmaker is urging the legislature to revise the country's Criminal Law to tighten punishment on pyramid selling so as to secure a good market environment.

 

"Pyramid selling is becoming more and more serious in many places, which has led to a series of social and security problems including robbery, kidnapping, theft and illegal detention," said Liu Litao, a deputy to the Tenth National People's Congress (NPC) at the ongoing parliamentary session.

 

Pyramid selling, in which one salesperson relies on recruiting subordinate sales people, was banned by cabinet regulations in 1998. Authorities said such a scheme, though an accepted method of marketing in many other countries, "has become a synonym for cheating and hoodwinking in China."

 

Liu said it was estimated that more than one million Chinese had been involved in pyramid selling and about 40 billion yuan (US$5.23 billion) was absorbed into it," said Liu.

 

"The crackdown on pyramid selling launched by the industrial and commercial regulators and public security departments has scored limited effects due to the lack of relevant laws," said Liu, a senior police officer in east China's Jiangsu Province.

 

In 2005, China's State Council issued regulations to ban pyramid selling. However, Liu said most of the people involved in pyramid selling won't get punished according to the current regulations.

 

"Therefore, we need to make pyramid selling a crime in the Criminal Law to tighten punishment on organizers and those actively involved in it," the lawmaker said.

 

Pyramid scams exist in both rich and poor regions across the country. China cracked 3,377 cases of pyramid sales from January to October in 2006, according to the Ministry of Public Security.

 

(Xinhua News Agency March 13, 2007)