Behind the hysteria about China's
tainted goods By Kent Ewing
HONG KONG - After initially putting up
stiff resistance to an avalanche of complaints
about tainted goods ranging from toxic toothpaste
to exploding mobile-phone batteries, China is now
going out of its way to demonstrate adherence to
international standards of quality control.
While this is clearly a positive
development, the fact remains that Beijing simply
does not have the regulatory regime in place to
back up its new rhetoric. Perhaps with this is
mind, Chinese
officials - citing their own
safety concerns - have made a point of blocking
Western imports of fruit, meat, seafood and
mineral water in an apparent tit-for-tat
retaliation that they hope will cool what they see
as a growing international hysteria over Chinese
exports.
In the future, expect more
scandals involving tainted Chinese products
followed by more rhetoric and selective
retaliation from the Chinese government - and
maybe another high-profile execution or two. But
until Beijing puts its regulatory house in order
and reduces the rampant cheating and corruption
that are endemic to the system, there will be no
substantial change in the sometimes frightening
status quo.
At present, the manufacture of
fake and tainted products is a hugely profitable
business in China, the world's largest exporter of
consumer goods. To stop it would require severing
the unscrupulous government-business nexus that
has become part and parcel of China's stunning
economic growth.
The litany of complaints
over the past several months has focused on a
spate of animal deaths in North America tied to
pet food laced with melamine, cough medicine and
toothpaste thickened with toxic diethylene glycol,
toys coated with lead-based paints, fish loaded
with antibiotics, antibiotics infected with
bacteria, mobile-phone batteries that explode, car
tires that collapse, and more.
For the
most part, the Chinese government's response has
consisted of a stubborn defense of its record on
product safety. But Beijing has also retaliated,
refusing to accept 30 tonnes of "contaminated"
Australian seafood and five containers of Evian
mineral water that allegedly contained too many
micro-organisms. Imports from several US meat
processors have also been suspended. According to
China's General Administration of Quality
Supervision, Inspection and Quarantine (AQSIQ),
frozen poultry products from Tyson Foods Inc - the
world's largest meat processor - were infected
with salmonella. Other blocked imports included
frozen chicken feet from Sanderson Farms that the
inspection agency found to be contaminated with an
anti-parasite drug and frozen pork ribs from
Cargill Meat Solutions Corp containing a
leanness-enhancing feed additive.
A
Cargill spokesman denied the agency's claims,
while Tyson Foods pledged to "work with the US and
Chinese governments to get this matter resolved".
Sanderson Farms has yet to respond.
The
retaliation has been accompanied by an adamant
insistence on the quality of Chinese exports, with
an editorial in the state-run China Daily
asserting that "more than 99% of food exports to
the US in the last three years met quality
standards" - an interesting claim considering that
Chinese regulators have admitted that nearly 20%
of consumer products checked for national
consumption are substandard or tainted.
Also in the China Daily, AQSIQ head Li
Changjiang attacked the international media for
making exaggerated claims. "Some foreign media,
especially those based in the US, have wantonly
reported on so-called unsafe Chinese products,"
said Li. "They are turning white to black." Li
added: "One company's problem doesn't make it a
country's problem. If some food products are below
standard, you can't say all the country's food is
unsafe."
But, of course, it is not just
one company that is producing tainted goods. The
problem is systemic, and last week, under mounting
international pressure, Beijing finally seemed to
wake up to the idea that competing in the world
market means acting on criticism and embracing
international standards.
In agreeing last
Wednesday to ban the use in toothpaste of
diethylene glycol - an industrial solvent that is
a component in antifreeze - Li's agency seemed to
back away from what until then had been an
entirely self-protective stance on the quality of
Chinese exports.
Even after Chinese
toothpaste was removed from the shelves of stores
in the United States, Canada, Japan, Singapore and
Hong Kong, Beijing had stuck to its guns,
insisting that domestic tests showed the
toothpaste to be safe. Somehow, however, the world
was not reassured and, as complaints continued to
rise, the ban was finally announced.
Also
last week, in another gesture to the international
community, the State Food and Drug Administration
(SFDA) tightened standards for approval of new
drugs and strengthened penalties for violators in
an industry that has been fraught with fraud and
corruption. From now on, companies that submit
fake drugs for approval will face fines as high as
30,000 yuan (nearly US$4,000) and a ban from any
other tests of up to three years.
The new
regulations allow for expedited approval of
important new drugs but toughen requirements for
generic drugs to make sure they measure up to the
brands they copy. The SFDA also announced that,
starting in September, Chinese food exports will
be stamped with an inspector's approval to show
that they meet government standards.
And,
in case anyone missed the point, former SFDA head
Zheng Xiaoyu was executed on July 10 for taking
nearly $860,000 in bribes to approve bogus drugs
during his 1998-2005 tenure. The official
responsible for drug registration under Zheng, Cao
Wenzhuang, was also sentenced to death, albeit
with a two-year reprieve, and Zheng's widow and
son have been imprisoned on corruption charges.
Many Chinese bureaucrats have received far more in
under-the-table inducements than did Zheng and
lived to tell the tale, so his execution was
clearly calculated to send the message that the
government is serious about cleaning up its act on
product safety.
"The few corrupt officials
... are the shame of the whole system," said SFDA
spokeswoman Yan Jiangying, "and their scandals
have revealed some very serious problems. We
should learn from these cases. We should step up
our efforts to ensure food and drug safety, which
is what we are doing now."
Beijing has
also pledged to monitor food safety at the 2008
Summer Olympics, and even the People's Liberation
Army has issued a circular underscoring food
safety as an important aspect of "preparation for
military conflicts".
But messages are one
thing; action is another. China's regulatory
regime has not grown nearly as fast as its runaway
economy, and thus there is simply no way for
regulators to keep up with the frauds and cheats
in the system. For example, while China is a
nation of 1.3 billion people, the staff at the
Beijing State Environmental Protection
Administration office numbers fewer than 300.
By contrast, the US, with a population of
300 million, has an employee payroll of more than
17,000 at its Environmental Protection Agency. Is
there any wonder that China's environment is
losing the battle against the country's breakneck
capitalist growth?
More to the point, the
SFDA approves 10,000 new drugs a year, while the
US licenses about 50 new drugs annually. It is
also no mystery why Chinese food exports can go
wrong: 75% of China's food is produced by small,
unlicensed companies that often escape regulation.
The result of this regulatory inadequacy has been
- and will continue to be - a lot of fake, faulty
and sometimes downright dangerous goods.
That said, there is also something to the
Chinese argument that the quality-control issue is
being exploited as a de facto trade barrier
against the country's exports. It is true that the
nation has been unfairly singled out, especially
in the US, where trade tension is already high
over the Chinese currency, which some critics say
is undervalued by as much as 40%.
A recent
New York Times report, citing US Food and Drug
Administration data, showed that China was far
from alone in exporting goods of poor quality and
was not the worst offender. For example, while
seafood from China was impounded 391 times last
year, produce from the Dominican Republic was
seized 817 times and candy from Denmark 520 times.
India and Mexico also compared unfavorably with
China. Nevertheless, the common perception in the
US and elsewhere is that China is the chief
perpetrator of export fraud and danger.
As
their country is the world's biggest exporter,
however, that is a perception with which the
Chinese have learned they must
reckon.
Kent Ewing is a teacher
and writer at Hong Kong International School. He
can be reached at kewing@hkis.edu.hk.
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