The State Administration for Market Regulation and the Ministry of Finance jointly issued a regulation recently, offering rewards to people who promptly report to the authorities food and/or drug safety problems, product quality or other issues that could have major social consequences and carry systemic risks. The reward can be as high as 1 million yuan ($154,399). The regulation comes into effect on Dec 1.

Every year, some restaurants and supermarkets are found violating food safety norms and are duly punished. The regulators also penalize pharmaceutical and cosmetic companies over quality issues. The State Administration for Market Regulation recently penalized six major domestic enterprises after media reports and spot checks by officials revealed they had breached food safety norms.

However, with about 140 million market entities in China, it is not enough to rely only on strict supervision and media exposés to regulate the market. Especially because outsiders cannot easily get the real picture given the way the food and medicine sectors function.

Therefore, it is necessary that people supervise these 140 million market entities. Encouraging insiders to act as whistleblowers will help build a pluralistic co-governance pattern. For example, there are 10 million registered take-out delivery workers nationwide. The number of catering service providers and enterprise employees is far higher. If this large army of people is mobilized, a strong force can be formed to supervise the market. At the same time, there are also tens of thousands of ordinary consumers whose enthusiasm, if mobilized, will deter the market entities from using illegal means to make profits.

Detailed measures should also be worked out to boost the enthusiasm of the public and insiders, and different regions can promulgate their own standards. For example, Fuzhou, capital of Fujian province, has issued a regulation encouraging catering personnel to report to the regulators if the owner uses substandard materials and/or if hygiene conditions in a restaurant are poor. If these allegations are verified, the informants can be rewarded anything between 400 yuan and 500,000 yuan.

There is also a need to establish a protection system to ensure the safety of whistleblowers. The new regulation allows for both real-name and anonymous reporting. Special procedures will also be formulated for rewarding anonymous whistleblowers, making them feel more secure. In addition, the supervision mechanism will be strengthened to ensure the provision does not end up becoming a tool for mischievous slander.