China to issue regulations on direct sales promotion

Three regulations aiming to straighten out China's direct sales promotion have been submitted to China's cabinet, the State Council, the Beijing-based Jinghua News reported here Monday.

Citing an anonymous sources close to issue, the newspaper said the package of instrument jointly drafted by the Ministry of Commerce and the State Administration for Industry and Commerce was the first of its kind in China and will include a regulation on the management of direct sales promotion, a management method on the training of direct sellers and a regulation forbidding pyramid marketing.

These regulations required companies engaged in direct sales promotion to have a registered capital asset of 80 million yuan (9. 67 million US dollars) and a deposit of 20 million yuan (2.42 million US dollars).

The bonus granted to direct salespersons should be restricted to 30 percent of their sales revenue, said the newspaper.

All companies that accord with the stipulations will have a chance to get the license. No ceiling will be imposed on the number of qualified companies, said the newspaper.

Source: Xinhua