Photo by Erica Schlaikjer

Obama’s decisive and historic victory in the U.S. presidential election brings many hopes and promises.

What could his tenure in the White House mean for China’s environment?

Bloomberg.com reports that Obama’s “protectionist” trade policies may lead to opposition in many Asian countries.

Obama’s goal of corralling developing economies into binding pollution-reduction commitments and his pledges to insert labor and environmental standards in trade agreements may spark unified opposition in an Asia that has more tools than ever to resist Western pressure.

The article says that Obama may develop a more “moderate” approach once he is sworn into office, mainly “because the U.S. needs China’s help to solve the financial crisis that threatens economies worldwide with recession” and can’t afford to risk losing China’s support by being “too tough.”

And since “the global financial meltdown has undermined the U.S. as an economic model and advocate of free-market policies” then the U.S. is especially not in a good position to take a hard line.

“The U.S. capacity to dictate terms on trade and environment issues to Asia has weakened considerably,” said N. Bhaskara Rao, chairman of the Centre For Media Studies, a political-policy group in New Delhi. “They are done in, big-time, by the economic mess they are in.”

This means China is probably more likely to gain the support of developing countries when it comes to dealing with trade and climate change issues than America. But China’s influence and leadership in this case is a bit worrisome, seeing that the big Asian nation is not willing to sacrifice economic growth to shift its energy structure, and it also tends to point fingers at the U.S. and other Western countries as being responsible for solving the climate crisis, when instead, what we need is global collaboration.

Indeed, the environment is one of the most important items to confront on Obama’s to-do list.

From The Guardian:

“The environment is as much a foreign policy issue as a domestic one, given the 13-month deadline for a new UN climate change treaty. Obama has committed to global carbon emissions caps as a means to help China and India come on board the UN pact, but that requires a reliable plan to rein in Big Oil, King Coal, and other fossil-fuel producers with fearsome political clout. If Obama cannot coax Congress into passing a climate bill by summer 2009, expect the young president to fight climate change with one stroke of his pen through new regulations.”

To be more specific about Obama’s current plan, “He would set a goal of reducing US emissions to 1990 levels by 2020 and by 80 percent by 2050, using a cap-and-trade system and a 10-year programme worth 150 billion dollars in renewable energy research and deployment,” according to the AFP. “He would not wait for China and India to act, but insist they must not be far behind making their own binding commitments, Obama aides told Nature, the British science journal, last month.”

Ah, again, the hopes and promises. But they mean nothing if the U.S. Congress fails to act and reach consensus.

Traditionally, it takes a US president months to appoint a cabinet and gain Congressional approval for it.

Then there is the mammoth challenge of a carbon emissions bill, which powerful utilities and oil corporations may well fight every inch of the way.

…

…other countries will be demanding “some indication” that Congress will go along with Obama’s climate policies. In 1997, the US Senate — whose approval is needed to ratify a treaty — voted 98-0 against the Clinton administration’s approval of the Kyoto format.

….

To marshall support, Obama could argue that investment in renewables will create jobs and channel some of the revenues from the carbon market to the public’s benefit, said some analysts.

He could also argue that energy efficiency is linked to to national security, weaning the US away from imported fossil fuels from volatile regions.

Only time will tell if Obama’s plans will gain public support. He’ll have to make a strong business case for these policies, because people won’t want to help the environment if it doesn’t help their bottom line.

Bill McKibben from Yale Environment 360 talks about some of the big pieces of legislation that Obama should push for domestically, and I add my two cents about how it could affect China in the long-run.

1. “Massive government investment in green energy.”

If successfuly, this could lift the U.S. out of its current financial crisis, and therefore re-establish its economic clout, especially with countries like China. Also, if the U.S. becomes more self-sufficient in green technology and creates more green-collar jobs, there will be less of a need to rely on China for imports or outsourcing jobs. For example, McKibben says, “you’re not going to send your house to China for a layer of fiberglass.”

2. “A stiff cap on carbon, which will help drive the process.”

McKibben says, “Current versions of cap-and-trade are too weak and too riddled with loopholes — getting a clean, tough bill through Congress needs to be a preoccupation of President Obama.”

3. “Once the president has done all that tough stuff at home, he’ll need to do it all over again, globally.”

In December 2009, world leaders will meet in Copenhagen to come up with a successor to the Kyoto Protocol, which expires in 2012. “This will represent the last legitimate shot the world has at putting itself on a new carbon regime in time to make any difference,” McKibben says. China and the U.S. will need to display strong leadership in order to create any real impact. Hopefully, the global economy will be in better shape by then, or else we’ll be faced with the same ol’ excuses of not wanting to save the planet for fear of further harming business and limiting development.

Some final thoughts from McKibben:

It will be incredibly difficult, mostly because we begin from such unequal places. China has lots of coal and it would like to burn it, because it’s the cheapest way to pull rural Chinese out of dire poverty (something the country’s leaders would quite like to do because otherwise they won’t be the country’s leaders much longer). If we want them to use, say, windmills instead, we’re going to need to “share some wealth,” north to south, to make it happen. The Chinese opened the bidding last week, with a suggestion that one percent of the U.S. annual GDP would be a good amount to send their way. That’s going to be quite a political ask — it means that Americans would be working roughly one hour every two weeks just to help the global South build up their clean alternatives. What we’re talking about is a carbon version of the Marshall Plan, and it would mean Obama needs to be not just FDR but Truman and Ike as well.

Here are some highlights I’d like to share:

WikiCarbon

Image via China Carbon Forum

The China Carbon Forum, a Beijing-based nonprofit professional network dedicated to reducing greenhouse gas emissions in China, has created a wiki community portal for those interested in the so-called “carbon market,” defined as all the “regulatory, financial, investment and trading aspects related to renewable energy, clean technology development and transfer, as well as carbon emission reduction certificate trading.”

Here’s the main page of WikiCarbon, and you can read more about it in the “About” section.

The idea is to post event listings (extensive and relevant, but hard to navigate), links to influential Web sites and blogs (a good start, but limited and not very detailed), and initiate online conversations through “Hubs,” of which some have moderators and currently include the following topics:

• Trading Platforms in China
• Regulations and Policies
• Monitoring of CDM (”Clean Development Mechanism”) Projects
• The VER Market
• Carbon Sinks
• Vertical Technology Transfer & Finance
• Research, Development & Marketing
• Employment

The information is useful, but disorganized and not user-friendly. Perhaps as more registered users join the community and contribute to wiki edits, the resource will become a more valuable tool.

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Wokai.org

Image via Wokai.org

Wokai is getting ready to launch! You can hear more about this innovative microfinance organization by listening to my recent podcast interview with founders Casey Wilson and Courtney McColgan.

Here’s a note from the team about how you can help:

1. Make a Secure, Tax Deductible Online Donation: So far we have raised nearly $14,000 of the $50,000 we need to underwrite our operations through April 2009. Thank you to everyone who has contributed!

2. Join the Wokai.org Pilot Program: So far more than 50 supporters have helped us improve the site by making five $10 contributions to women in Inner Mongolia and sharing their comments on the experience. We are looking for 150 more friends to join in. “I found the site to be very well designed overall. Very impressed with its ease of use and intuitiveness!” commented one participant.

Also, CONGRATULATIONS to Wokai for becoming one of 10 finalists for the Staples Youth Social Entrepreneur Competition, an initiative of Ashoka’s Changemakers.net. Wokai was chosen as one of 500 entries from 61 countries. They’re calling on your vote to advance to the winners’ list:

To win, we need to get the most votes between now and November 10! Go to http://www.changemakers.net/en-us/competition/staplesyv and vote for Wokai. You must login and vote for 3 organizations. It takes about 3 minutes, but will make a world of difference for our non-profit.

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Givology.org

Image via Givology.org

I got an email from Danielle Matsumoto, marketing associate for a new startup called Givology.org.

The nonprofit was founded by a group of undergraduates at the University of Pennsylvania last spring. Similar to sites like Wokai.org and Kiva.org, Givology.org is an online P2P platform that raises money for student scholarships and education projects in the developing world.

Givology’s current students and education projects are in China, many from rural communities, but the organizers say they have plans to expand worldwide with new partnerships. “Givology’s vision is to create a global community of people connected through their belief in the transformative power of education,” Matsumoto says.

Here’s how Givology works: Individuals view profiles of students and education-related project profiles on our website. They then select which ones they would like to support as well as the amount they would like to donate to each one. Once a student or project is fully funded, the money is channeled to our local partners, who disburse the funding. Partners also provide regular updates from each student or project via givology.org, and donors even have the option to message the students they are supporting.

I hope to write a more in-depth profile of the organization soon. Stay tuned!

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CODE: Center of Dream Enterprise

Image via CODE

My sister Amena Schlaikjer, who works for ?What If! Innovation’s Shanghai office, informed me about an upcoming event sponsored by the Center of Dream Enterprise (CODE), which teaches students about social innovation in its “Dare to Dream” course. We wrote about founder and leading lecturer Steve Koon in August.

In December, at least 100 students of social entrepreneurship from China’s top universities will showcase their CODE projects at ?What If!’s Shanghai office. Amena says they are also interested in internship and educational opportunities abroad.

Image via Social Venture Group

As China’s grassroots nonprofit sector gradually develops, the age-old question that plagues the industry worldwide sharpens in focus: Where can these nascent Chinese nonprofits secure funding to get the ball rolling and to keep their operations afloat?

That’s where Shanghai-based Social Venture Group comes into play.  SVG is developing a crucial link in the nonprofit chain, connecting foundations, corporations and individual donors to stand-out Chinese nonprofits. Their main mission is to build a community of investors in–or interested in–China, who “share a vision for investing in social causes of the 21st century.”  By making philanthropy easy (SVG does all the due diligence) and effective (through their nonprofit capacity building efforts), SVG hopes to increase the amount and the impact of philanthropy in China.  Most donors are on the prowl for education or children-related organizations to support, and SVG has already developed projects with China’s only orphanage for the blind and with teachers who work with autistic children.

SVG is a go-between for charities and donors, a cutting-edge resource for nonprofits, and a professional and trustworthy face for the Chinese nonprofit sector.  Most of all, SVG embodies the spirit of innovation that has the potential to transform China’s social issues from the grassroots up.

Photo by Greg Baker/Associated Press via The New York Times

Courts Compound Pain of China’s Tainted Milk
By Edward Wong
The New York Times
October 16, 2008

Tainted infant formula is the latest in a long string of food and drug safety problems that have exposed corruption and inefficiency among China’s regulators. But the problem goes well beyond the inability of regulators to police a huge, dynamic economy. Companies that produce shoddy goods rarely face financial penalties from the legal system, run by the Communist Party.

Some lawyers and judges are making great efforts in China to establish the power of the courts. Still, courts often remain passive pawns in the party’s efforts to handle big disputes behind closed doors.

This NYT article explains how China’s courts are avoiding taking any responsibility for the pain of thousands of parents across China who have yet to receive justice and compensation for the death of their children following last month’s tainted milk scandal. A similar situation occurred after the Sichuan earthquake, in which children died when their schools collapsed. Local governments agreed to compensate grieving parents with money, so long as they agreed to drop demands for investigations into faulty school building construction. “Most of the parents accepted the money, but many said they were furious that no one had been held responsible for the deaths of their children,” Wong writes.

Class-action lawsuits, commonly filed in the West for widespread product liability cases, are harder to initiate (and even harder to win) in China, where government officials view them as a political threat, as well as a hindrance to social stability. In fact, these types of lawsuits are actively discouraged. Some judges make the excuse that since Chinese courts have little experience dealing with class-action suits, then consumers would probably end up with little legal protection, so it’s best to go the “traditional” route and dole out compensation for things like medical bills.

The court’s inaction, Wong writes, involves these major reasons:

• “Chinese officials, under pressure to promote fast rates of economic growth and to enforce social stability, routinely favor producers over consumers.”
• “Officials also view high-profile lawsuits as a potential political threat and go to great lengths to silence the plaintiffs rather than allowing the wheels of justice to turn.”
• “The milk scandal involves a web of complicity linking company executives to government officials. Those connections make sorting out responsibility a delicate political task. Rather than allow the courts to weigh in, officials prefer to press complainants to take compensation.”

The problem is, keeping these cases under wraps by paying the plaintiffs into silence has profound long-term consequences for China’s growth and development:

Qian Weiqing, the head of the Dacheng Law Office in Beijing, said at a legal conference last week that the government, in continually suppressing such lawsuits, had “missed many opportunities to improve the system to deal with these problems, including perfecting the law enforcement system, the judicial system and the relief system.”

What do you think? Would the acceptance of class-action lawsuits in China threaten the country’s social stability? Is the government ready to take on mass complaints? Are Chinese companies prepared to face retribution? Can they adequately payback their plaintiffs?

And if Chinese courts do not take these issues more seriously, according to international norms, will that somehow threaten the future of the country’s economic growth?

Now, considering ResponsibleChina deals with corporate social responsibility, I am of the viewpoint that state regulation is not enough to prevent future food scandals, just as Peter Ford writes about for the Christian Science Monitor in his article, “Behind bad baby milk, an ethical gap in China’s business” (h/t to China Law Blog.) Corporations must also take responsibility, for at least the fact that “producers realize now how precious their brand name is,” says Dali Yang, a politics professor at the University of Chicago.

“Central regulatory reform is only part of the problem,” argues Richard Suttmeier, a University of Oregon expert on Chinese product safety. “There is nothing you can snap your fingers at and solve.”

With nearly half a million food producing and processing companies, according to official figures, “there are more individual producers than the government could ever regulate,” Prof. Suttmeier adds.

The authorities “will be defeated constantly” unless “they begin to think how you make multiple producers responsible agents,” he says.

A wide range of reforms is needed, he warns, from capital markets that would starve misbehaving companies of funds to a legal system that would allow aggrieved consumers to sue firms for damages.

But when a crisis like this does occur, I think it’s still important for the courts to take action, is it not? The blame can’t rest solely with the companies. There needs to be checks and balances on both.

Here in my time zone, we have just a few more hours left of Blog Action Day 2008, where bloggers all over the world commit to covering one specific topic. This year, that topic is POVERTY.

I wanted to examine the cross-section between poverty and environmentalism. And I won’t just focus on China because I believe this issue is widespread and relevant to many countries.

SUSTAINABLE LUXURY

The first thing that comes to mind is the idea of “eco-luxury,” which has been defined as “the ‘production process’ of economic activities that simultaneously promote a sustainable economy and high quality standards,” according to one lodging website. This can involve trends in tourism, production and fashion, for example in China, an eco-friendly boutique hotel in Shanghai, a responsible manufacturer of bamboo kitchen products, and organic baby clothes. (For a bigger list of worldwide examples, check out this online contribution from environmental consultant Michael Jessen.)

WorldChanging.com writes about “The Sustainable Luxury Myth,” responding to the argument that pricey eco-friendly products and experiences are out of reach for most people, and therefore, cause for concern (from a social equality standpoint.) But, Josh Dorfman writes, “Equating sustainability with luxury is like equating technology with luxury.” What he means is that we’re only in the early stages of sustainable design and consumerism, just like there was once an early stage of computer manufacturing, and once the trend becomes more mainstream, so-called “luxury” goods will be more accessible, and therefore, affordable. He writes:

Two years from now there will be no more talk of aspirational/out-of-reach sustainable luxury. Sustainable design-entrepreneurs are on the cusp of the next phase of economic growth where scale is achieved and prices begin to fall. As this transpires and more consumers articulate their demand through their purchases, multinational corporations, fueled by the profit motive, will respond to market signals and employ their vast economies of scale to drive prices for sustainably designed products even lower. Millions of consumers will be the beneficiaries as will be the planet. Sustainability might still take the form of luxury goods but it will also be found in more affordable products.

So, in this case, poor people will simply have access to environmentally friendly options. In other words, they will still be relatively poor, but at least they’ll be eco-friendly.

But what about if we think about the reverse process? How does environmentalism (and its byproducts, whether it be products or services or activism) actually reach out to poor people, and lift them out of poverty? When does environmentalism become the actual catalyst for change?

GREEN COLLAR JOBS

The best example of this is the growth of “green-collar jobs.” Van Jones, social entrepreneur and author of “The Green Collar Economy,” believes that a green economy, based on industries like renewable energy, sustainable agriculture and green building, can achieve the following:

• Rebuild a Strong Middle Class
• Provide Pathways Out of Poverty
• Strengthen Urban and Rural Communities
• Protect Our Health and the Health of the Planet

Jones fulfills this mission through the advocacy efforts of his nonprofit, called Green For All, which recently  “worked with national partners to produce “Green Jobs Now” – the first-ever ‘national day of action’ calling for green-collar jobs in the United States. More than 600 communities in all 50 states participated, with more than 50,000 signing a petition that called for federal government action to spur green jobs.”

Protecting and responsibly managing ecosystems can also help fight poverty.

PROTECTING ECOSYSTEMS

The Marketing & Strategy Innovation Blog has this nice write-up in reference to a World Resources Institute report, “The Wealth of the Poor: Managing Ecosystems to Fight Poverty,” which views the physical environment as a valuable asset to the poor. “WRI deftly connects the dots,” the blog says, “showing how natural resources — soils, forests, water, fisheries — managed at the local level are frequently the most effective means for the rural poor people to create wealth for themselves.”

Nearly half of the world’s six-billion people live on less than $2 per day, and three-quarters of them live in rural areas that depend overwhelmingly on natural resources for their income. When these ecosystems become degraded, as many have over the past 50 years, they are unable to provide the fuel for economic development that can boost the rural poor beyond subsistence and into the mainstream of national economies.

But then again, poverty and environmentalism can also contradict each other.

PARADOX?

Take this example: “Would you rather help the poor or combat global warming?” asks Tim Haab of Environmental Economics.

In short, a group of environmental organizations and cities (Greenpeace, Friends of the Earth, Boulder, Colorado and Arcata, California) want to sue U.S. development agencies (Overseas Private Investment Corp. and the Export-Import Bank of the United States) that fund power plant construction projects in developing countries.  The premise, such projects produce greenhouse gas emissions which cause global warming which harms the U.S. So, such projects should fall under the National Environmental Policy Act.  It requires economic assessments of government projects with environmental impacts.

So let me get this straight…U.S. environmental organizations want to improve the environment by stopping development projects in the poorest countries.

These examples all show the close links between the environment (and its degradation) and poverty. The point to remember is to always be concerned with the local situation. Where there are eco-friendly goods to be sold, make them affordable. Where there are green jobs to be created, make sure low-income people have access to them, through training, education and employment outreach. And where there are communities that depend on nature for their economic and social well-being, be sure to protect their most prized possessions–the land, sea and air. Finally, if and when it comes down to a choice between helping the poor and combating global warming, make sure that one doesn’t come at the expense of the other. There shouldn’t be a choice between either/or.

Image via Wokai.org

With about 300 million people living below the poverty line in China, microfinance–most commonly defined as small loans for impoverished individuals to help them achieve financial self-sufficiency–is an attractive option.

Wokai.org, “a capital-contributing microfinance intermediary,” is trying to bring money to Chinese entrepreneurs who want to set up like set up their own small businesses, like dumpling shops, fruit and veggie stands, and animal husbandry practices.

When Wokai launches its new Web site in mid-November, it’s going to be like Facebook, Kiva and Wikipedia combined, says 24-year-old Courtney McColgan, one of the co-founders.

Image via Wokai blog

“While we are a fundraising platform, we’re also an information platform, and we’re building a community around China microfinance in the United States,” McColgan says. She started the Internet-based nonprofit in the fall of 2006 with fellow American Casey Wilson. The two met while studying advanced Chinese at Tsinghua University, and since then, they have set up Wokai’s headquarters in Beijing and established three U.S. chapters: Seattle, San Francisco and New York. For now, they’re still recruiting a replenishable stream of interns and volunteers to help raise awareness about microfinance in China, as well as research potential lenders and set fundraising goals.

Wokai, which means “I start” in Chinese, fosters entrepreneurship and fights poverty by raising loan capital online from individual contributors for microfinance institutions (MFIs) in China. Its goal is to expand financial opportunities for the country’s poor (and mostly rural) population. Though its primary goal is fundraising, Wokai also provides “capacity building” for microfinance organizations, which can mean anything from emotional support for first-time borrowers to computer training for loan managers.

Logo via Wokai.org

How does it all work? According to the Web site,

Wokai partners with local MFIs which identify and screen potential microentrepreneur clients. Selected clients are then posted on the Wokai website through profiles that outline their business ventures and loan request. Contributors browse these profiles, select who and how much to finance, and then transfer money to Wokai through our online payment system. Once funds are transferred, Wokai distributes this loan capital to partner MFIs for allocation to microentrepreneurs. At the end of the loan cycle, partner MFIs collect loan repayments and re-issue loans.

Read my extended post on WorldChanging.com.

In the meantime, LISTEN to my podcast interview:

The ResponsibleChina Show: Courtney McColgan and Casey Wilson, Wokai.org

Music courtesy of MadMaxXB from Garageband

Earlier this week, Nazia Vasi of 2point6billion.com points out the countless other chemicals that can “create defects, abnormalities and/or death.” Yowzas. Nazia refers us to the Asian Food Information Center, which offers “Tips for Consumers Who Wish to Minimise Possible Consumption of Pesticide Residues” (not a particularly catchy name for a how-to guide). These tips include washing foods thoroughly, peeling outer skins and layers, and avoiding roadside plants.

But what about getting to the root of the problem, so to speak, which is to avoid pesticides and harmful fertilizers to begin with? Last year, John Paull wrote about “China’s Organic Revolution,” explaining the country’s adoption of its special “Green Food” system, which he says is a great start…but still not quite up to par with international standards. The world’s biggest pesticide user still has a long way to go. “There are concerns about China’s past agricultural processes and toxic inputs, the possibility of toxic residue in the soil and possibly in the food, and there are concerns about the long-term commitment to following the organic standards and the depth of understanding of the organic requirements,” according to Jim Riddle, former chair of the USDA National Organic Standards Board, as told to the Chicago Tribune. Somebody, please, fix this problem!

The Associated Press recently notes that only the “elite” — senior politicians, government officials and retired cadres — get to enjoy “hormone-free beef from the grasslands of Inner Mongolia, organic tea from the foothills of Tibet and rice watered by melted mountain snow.” Where are they getting the goods? From the The State Council Central Government Offices Special Food Supply Center, a highly secretive department that enforces strict standards on food suppliers for its A-list clientele.

I say: Share the wealth! Your nation depends on it.

THERE ARE TWO CHINAS.
Sorry, I can’t get away from this issue. It all goes back to the milk. Howard French writes about “A crisis rooted in two Chinas” for The Star. He answers the question we all want to know: “They can win 51 gold medals…So why can’t the Chinese government safeguard baby formula for the nation’s infants?” The answer, French explains through interviews, is multifaceted. One source says the government cares more about protecting its international image than saving the lives of its own citizens (PR dilemma!) Another points to China’s failure as the result of government corruption and the lack of NGOs and other civil society watchdogs (free the press!)

China has so much potential. But like any two-face, it’s hard to tell if it’ll use its superpowers for good or, dare I say, evil.

GIVE A LITTLE.
The Web 2.0 of China microfinance, Wokai.org (which I will be covering in an upcoming podcast) launched an email fundraising campaign this month in preparation for the launch of its “person-to-person contribution platform” this November.

A note from the founders: “If you would like to make a contribution, please visit http://www.wokai.org/donate.php. Any dollar amount that you can give will allow Wokai to make our cause of enabling you to help microentrepreneurs in rural China a reality. All contributions are 100% tax-deductible!”

WHAT’S CHINA GOT TO DO WITH THE U.S. PRESIDENTIAL ELECTION?
“China’s impact on the environment and its role in addressing the problem of climate change has assumed increasing importance,” says the USC US-China Institute. And that’s why the center released a new eight-part video documentary, “Election ‘08 and the Challenge of China, ” reported by Mike Chinoy, former CNN Beijing bureau chief and currently the Edgerton Senior Fellow on Asia at the Pacific Council on International Policy.

I haven’t watched the video (YouTube links don’t work?) but as soon as I do, I’ll be watching. And I suggest McCain, Palin, Obama and Biden do the same.

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?