Photo via Daily Mail

By now, the tainted baby milk scandal in China is old news, but still, it is a story that continues to develop. So before you get bored of the coverage, get informed:

Derek Kravitz of Washington Post Investigations provides a good overview, including the following points:

At least 10 African and Asian countries have ceased importing Chinese dairy products.
China’s chief quality supervisor, Li Changjiang, resigned yesterday. The Post’s Maureen Fan reports that his office allowed the dairy company behind the tainted powdered milk, Sanlu Group, to be exempt from safety inspections.
Investigators in China say the dairy company added melamine to its products to boost profits.
The public anger over the tainted milk scandal forced government officials to offer financial aid and allow for public debate, a major departure on the part of the regime.

To read the full text with hyperlinks, click here.

This whole issue triggers a flashback of when I started ResponsibleChina.com one year ago, in the midst of tainted food, toxic toy and corrupt drug scandals. And then, in the fallout, there were even spin-off fake stories about bogus buns.

So what has China learned since then?

The blogger at A Mind Lost says this:

China has grown in recent years at a ridiculous rate. They are having to learn the lessons learned in other advanced economies much faster than anyone else had to and this is causing an enormous amount of greed. They clearly haven’t yet learned the lessons from last year’s lead-painted toy fiasco that if they short-cut the specifications for a product, it will go wrong and they will get caught out.

Greed? Is that really the culprit? Or is it negligence? A combination of both? Ignorance, perhaps?

Paul Maidment at Forbes offers a more analytical perspective:

The scandal comes after more than a year of extensive efforts by the central government to improve the monitoring and enforcement of product safety standards in the wake of a series of scares last year related to food, toys, tires, toothpaste and other Chinese exports. Melamine is the same chemical as was found in contaminated pet-food exports last year that caused scores of U.S. animals to die.

It shows how shallow roots those reforms have taken, and that the first instinct to cover up problems holds a strong grip, at least at the local and provincial level. The lessons of the attempted coverup of the SARS outbreak in 2002, Harbin’s river of benzene in 2005 and last year’s product safety scandals may have been learned at the top, but they have not trickled down far. That said, even the regulatory response of central government to the formula crisis has been after the fact.

Indeed, the Chinese government has been slow to act. “A product recall for the baby formula didn’t start until last week, even though Sanlu received complaints about the milk powder in March, and the first death suspected to be connected to the product occurred in May,” Forbes reports.

The solution? China needs a crash course in crisis management.

Clearly, product safety standards in the dairy industry are symbolic and consumers need to have their confidence restored in what is or is not safe to eat and feed to their babies. That means doing something unfamiliar in China, but which is the 101 of reputation crisis management in the West: Get all the bad news out as honestly and quickly as possible.

Otherwise, as we are seeing, when these crises blow open, they blow wide open and only remind the rest of the world why they remain suspicious of Chinese products.

The writer at Forbes isn’t the only one that shares this perspective. Jim Yardley at The New York Times offers similar reporting:

Chinese regulators have repeatedly failed to detect food safety problems in a timely manner. Moreover, despite ample evidence that secrecy tends to compound safety problems, companies and local officials still appear determined to minimize or cover up problems in the food supply rather than alert the public.

As an editorial in New Zealand’s Dominion Post says, “Transparency might have a short-term downside but buys respect in the longer term,” referring to Fronterra, the global food cooperative that partnered with Sanlu to manufacture the tainted formula.

Imagethief agrees that “suppressing the news is not a PR solution.” The blog says the (sort of) “winner” in this situation is Sanlu, because “all of a sudden what looked like their problem is a nationwide problem in which they are just one of many companies caught in the riptide.” The “losers,” though, are everyone else: “Consumers have no idea which domestic manufacturers they can trust.”

Who’s responsible for fixing this mess?

Imagethief says, “The Chinese government needs to explain why there is a pervasive problem in the dairy industry and what it is doing to solve the situation.”

The situation has already deteriorated. The sooner it moves into recovery phase the better. More bad news dribbling out over weeks and months will delay the start of the recovery and stoke the fires of suspicion and anger. This is one reason why it’s important to make sure people have enough real information to forestall the worst of the gossip and conspiracy theorizing.

So, bottom line, China needs to get real, be honest, educate the public and its business partners, and finally, find concrete, lasting solutions to consumer product safety regulations.

Check out China Law Blog’s compilation of posts about ensuring quality and safety of Chinese products, especially for foreign companies who are outsourcing Chinese goods. Some of its suggestions include the following:

• Increased vigilance, at the cost of low prices
• Strengthening a sense of trust between supplier relationships
• Conducting due diligence on manufacturers, using good contracts, and conducting inspections of  products
• “Trust but verify”

Does anyone else have any more solutions?

Danwei.org, where I syndicate my podcasts, recently uploaded a user-generated video about food safety in Beijing.

This short film by Ren Bo was shot for Danwei. She asks Chinese consumers in “wet markets and super markets what they worry about when it comes to food safety and hygiene. This video is also on Youtube and Brightcove (faster in US and Europe).

Some of the interviews show a general lack of education and awareness among local Chinese about the origin of food products, sanitation (”I buy whatever looks good”), and the enforcement of government regulations. Others exhibit an aloofness about food safety (”I don’t think it’s very clean. But whatever! I eat it and don’t get sick!”) Some people are more cautious than others (”The meat, I don’t really trust it, but the fruit, it’s OK”), but most people demonstrate a trusting attitude towards marketplaces and government inspections (”The safety is guaranteed by the government.”)

Here is some recent news about food safety in China:

• “Campaign discovers 1,113 tons of unqualified food“
  Xinhua
  October 25, 2007

BEIJING — China had destroyed 667 tons of unqualified or fake food products and ordered 446 tons to be removed from the market by October 8 in a nationwide campaign to improve the quality of goods and food safety, according to official statistics.

• “Food Safety Smarts“
  Wall Street Journal
  October 23, 2007

U.S. media coverage of China’s export quality control problems has focused on tainted Chinese exports of wheat gluten with melamine and seafood with antibiotics. Those headlines, in turn, have spurred demands in Washington for the FDA to “do something.” But the fuss obscures an important point: China may be the third-largest exporter of seafood and agricultural products to the U.S., but it is not the largest violator of U.S. food safety rules. FDA records indicate that the agency stopped more food shipments from India or Mexico in 2006 than from China.

• “Foreign-funded food enterprises in China to see more oversight“
  China Briefing Blog
  October 24, 2007

China’s foreign-funded food enterprises and branch offices - 25,570 according to the latest government figures - can expect increased oversight as Beijing moves to clean up its food safety record.

Click here to view my previous posts about food in China.

The inflation rate in China this year rose higher than expected to 4.2 percent, the highest its been since 1996, mainly because of rising food prices, according to the Asian Development Bank.

One reason for the spike was the outbreak of blue ear pig disease that caused pork shortages, thus driving up the prices of pork. The virus wiped out pig communities in China and spread to swine in Vietnam and Burma, according to the Washington Post.

Though there’s no evidence that the virus poses a threat to humans, there are signs that diseased pigs already have entered the food supply either directly because farmers may be trying to pass off diseased pigs as healthy ones, or indirectly because they have been thrown into water used for fishing or for drinking.

The Chinese government says that it has brought the problem under control, but some experts are skeptical, remembering the secrecy and censorship surrounding the bird flu and SARS epidemics a few years ago.

While China’s central government has made numerous improvements since then in how it deals with infectious disease control and informs the public, it has once again been slow to share scientific data and tissue samples with other countries.

As a result, there is worry that while China is lagging, the virus is quickly turning into a global problem.

While China’s previous reluctance to share information may have been the legacy of years of secrecy, its reasons for withholding information this time may be about something else: business interests.

But neglecting your environment–i.e. not taking care of your sick pigs–comes with a cost that outweighs profits or other “business interests.” Inflation, which affects everyone in a consumer society, is one of the main effects.

Now China will have to work extra hard to get everything back to target.

The aim is to rein back the growing trade surplus and at the same time ease strains on the environment by reducing goods production that requires high inputs of energy and natural resources, and that causes high levels of pollution, said Zhuang Jian, senior economist of ADB’s China Resident Mission.

In addition, the key challenge for China is to reduce the country’s reliance on exports and investment for growth in favor of private consumption.

“Such a switch could lessen vulnerability to external shocks and ease environmental strains caused by the emphasis on export and investment-led heavy industry,” said Zhuang. (For full story from China View, click here.)

In other news, China’s leading meat and food processing company, Zhongpin, was honored with the 2007 “China Top Brand” award for its pork products, according to the PR Newswire on CNN Money. Let’s hope the company doesn’t get hit with a food scandal any time soon.

The “China Top Brand” award represents the “blue ribbon” approval granted by General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ) on behalf of Chinese Central Government. The selection criteria for the award include categories such as quality, market share, development capability and social responsibility.

HIV-infected blood products for hemophiliacs.
Baby-killing milk powder.
Catfish laced with antibiotics.
Thomas the Tank Engine toys coated with lead paint.
Children-choking chewing gum
Cancer-causing egg yolks.

They sound like props out of a sci-fi horror flick, but in reality, they represent the most recent food and drug scandals to hit China.

Geoff Dyer analyzes the lack of accountability and transparency in China’s political system and how it undermines consumer confidence and product safety in his article for the Financial Times, “Bad blood between the state and stricken consumers.“

Why, oh why can’t the Chinese government regulate its industries? And why can’t China’s authorities and its suffering citizens get along? (Dyer highlights one particularly confrontational incident in which one angry HIV-positive patient, claimed to be infected with blood treatment manufactured by a state-owned company, Shanghai Institute of Biological Products, “drew his own blood with a syringe and attacked a policeman with it.” Yowza!)

Major points:

• The problems:
  • “The government’s main quality watchdog said this month that nearly 20 per cent of the products it had tested this year failed to meet safety and labelling standards.”
  • “According to consultants at A.T. Kearney, China has only 30,000 refrigerated food trucks and needs 10 times as many. The country will need to invest $100bn in warehousing and transport to repair its ‘broken food safety process’.”
  • “Last year, the government revealed it had discovered 114,000 unlicensed drugmakers. It also says there are 450,000 food manufacturers, 80 per cent of which have fewer than 10 staff.”
• The reasons:
  • China lags behind in developing the necessary institutional structures to manage capitalism, i.e. independent regulatory agencies, being able to seek redress in the legal system, and a free press.
  • China is not a democracy.
  • There are too many regulators, often in competition with each other, which makes it difficult to supervise, collaborate and maintain efficiency, and this also contributes to corruption and bribery.
  • Many companies do not have the resources to invest in hygiene.
  • The media are shuttered for exposing scandals and weaknesses in the government.
  • The economy is growing faster than the government can keep up with it.

[tags]China, social responsibility, drug scandal, food scandal[/tags]

(Illustration via Uninova.)

The “Made in China” label is getting a bad rap, in light of all the recent food scares coming out of the country. And now, marketers at foreign food and drug brands are taking advantage of consumer fears by emphasizing how their products are NOT made in China.

“NOT Made In China“
BusinessWeek
July 30, 2007
By John Carey

• Swiss ingredient maker DSM Nutritional Products launched a “premium” Vitamin C at more than double the price for bulk Vitamin C, and it’s been flying off the shelves, which is due in no small part to its emphasis on “quality, reliability and traceability.” “With our plant located in the green hills of Scotland,” the company says, “we are the only western vitamin C producer and we offer the world’s premium range of pure vitamin C forms.”
• Upscale New York grocery Fairway reassures consumers that none of its seafood is Chinese. From the company Web site: “We pay serious attention to the fact that WHERE a fish was caught, HOW it was caught and WHEN it was caught is at least as important as how it is best cooked.”
• IBM is pushing systems to trace the food supply from source to market.
• Specialty dog food producer Freshpet tripled its sales after getting rid of overseas ingredients. “Our meats are all fresh, never frozen or preprocessed prior to cooking and all of our ingredients are locally sourced from the US using stringent quality standards.”

With today’s global food supply, however, eliminating every particle from China is impossible for most major food companies. Even a simple product like a cereal bar contains ingredients from India, the Philippines–and China, which now supplies the bulk of the world’s vitamins, apple juice, and other goods. “I think most people are surprised by the diversity of the sources,” says ingredient consultant Peter Kovacs.

(See this graphic, “The Global Food Supply Chain.”)

So what do you think? How can China link back into the chain?

I was digging around Shanghaiist today and found out that the fake bao zi story (about caustic soda-soaked, cardboard-filled buns) was made up! (Read my original post here.)

Kind of creepy how we all thought it could be true…

Photo via callalillie

In other news, my favorite Chinese candy, White Rabbit, was banned in the Philippines after the Philippine Bureau of Food and Drugs claimed that the sweet, white, creamy morsels contained traces of formaldehyde–the stuff that you use to embalm dead animals, à la 7th grade science class.

Meanwhile, Guang Sheng Yuan Group, the Shanghai-based company that makes the candies, denied that its most popular brand contains the cancer-causing chemical.

Shanghaiist says it will be keeping a close eye on the unraveling of the investigation. Sounds like everyone’s freaking out about China’s product safety after what went down last week with the execution of Zheng Xiaoyu and other food and drug scandals. But did we really have to scare the children? It’s like saying Halloween candy contains toxic metal, or plastic dolls are filled with hundreds of needles (true story, personally, that happened to me in Beijing in 2nd grade.)

Logo and text via the Guang Sheng Yuan Group company Web site.

“WHITE RABBIT” is one of the most famous brands of Guan Sheng Yuan (Group) Co.,ltd.and belongs to candy product. This product is very larruping that the candy’s surface swathe a very very thin velamen made from sticky rice and it can eat.People always are interesting in the sticky rice velamen.This product’s sales volume is very hot in USA(Kmart,Walgmart).

(Thank you to my cousin Erich for sending me this link!)

One of the best memories I have of Shanghai is picking up a hot, greasy, juicy meat-filled bun (”bao zi“) from the local street market on my way home from work. Had I known about this, though, I might have resisted the temptation to sink my teeth into the dough.

Fake steamed buns made from up to 60 per cent waste paper and cardboard have become the latest food to join a growing list of health scares in China.

Well, hey, I guess that’s one way to recycle.

But c’mon, street vendors! Did you really think people wouldn’t be able to tell the difference between sweet pork and cardboard soaked in caustic soda??

Read the full news report at Al-Jazeera.

Or check out the blog post by Japundit.

This is what happens if you accept bribes to approve shady drugs in China:

“China executes ex-head of food and drug agency”
Zheng sentenced to death in May for taking bribes to OK substandard drugs”
July 10, 2007
via MSNBC

BEIJING - China executed a former director of its food and drug agency Tuesday for approving fake medicine in exchange for cash, illustrating how serious Beijing is about tackling product safety, while officials announced steps to safeguard food at next summer’s Olympic Games.

Tighter safety procedures
Zheng’s death sentence was unusually severe even for China, which is believed to carry out more court-ordered executions than all other nations combined, and indicates the communist leadership’s determination to confront the country’s dire product safety record.

Are we to believe that China is serious about improving food and drug safety? Or should this execution just make us really scared about how nasty the Chinese government can be when it’s trying to save face, not food…?