China's industrial and commercial regulators have pledged to continue the crackdown on pyramid selling to secure a good market environment.

"Pyramid selling disrupts market order and hampers social stability and harmony. The crackdown must be continued," a statement from the State Administration for Industry and Commerce said.

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

The administration said it would intensify checks on the key areas where pyramid selling was rampant and improve online monitoring to prevent pyramid schemes from being sold through the Internet.

The administration also promised to impose stricter penalties on organizers and key members of pyramid selling groups and improve public awareness about the issue.

Pyramid scams exist in both rich and poor regions across the country. In 2006, police in eastern Shandong Province cracked a cosmetics sales scam that involved about 500,000 people in 16 provinces.

China has cracked 3,587 cases of pyramid sales in 2006 and prosecuted 2,111 people, according to the administration.

People guilty of organizing and running pyramid schemes involving a large number of people face prison terms of more than five years and can be ordered to repay up to five times the profits generated by their illegal business operations, according to Chinese law.

Source: Xinhua