Milk Scandal Continues in China
It’s received precious little attention in the American political blogosphere but the milk scandal in which four children have died, hundreds have kidney failure, and thousands have been sickened is enormous news in China:
BEIJING – China sought Saturday to shore up public confidence weakened by a milk safety scandal, with the president scolding officials for negligence and government agencies promising adequate supplies of uncontaminated milk.
The flurry of action comes as the government confronts one of the worst food safety crises in years. Many leading brands of powdered and liquid milk and other dairy products have been pulled from store shelves after infant formula contaminated with the industrial chemical melamine sickened more than 6,200 children and left four dead.
In a measure of the scandal’s scope, the Ministry of Health ordered all 31 provinces and major cities nationwide to set up separate 24-hour crisis hot lines to meet surging public calls and help arrange care for the sick.
The order followed a barrage of instructions late Friday from the State Council, China’s Cabinet, requiring hospitals to provide free medical care.
To further calm public jitters, the top economic agencies promised to monitor markets for supply disruptions and for any price-gouging in sales of powdered milk — a staple in rural China.
The order for hospitals to provide free medical care is at the very least partially window dressing. Hospital quality varies considerably in China and most hospitals are in the big cities. That’s true here, too, but it’s even more the case in China. Many of the victims live in rural areas without access to medical care.
The unfolding scandal about contaminated or adulterated milk products in China is materially related to the pet food scandal here in 2007 about which I wrote at the time. Melamine was found as a contaminant in products containing wheat or rice gluten that had originated in China.
Inexpensive tests for protein level commonly just test for nitrogen; melamine contains a lot of nitrogen and, consequently, adding it to a food product is a relatively inexpensive if unethical and illegal method of boosting the apparent protein content.
There are other ways that melamine could be introduced into the food supply than deliberate adulteration. It’s possible that sacks of melamine could have been intermingled with sacks of food additives in careless handling. Melamine is commonly used as a fertilizer in China (the nitrogen content, again) and reportedly overapplied. Uptake into the plant of excessive amounts of melamine could result in melamine remaining in the plant and its seed.
On April 27, 2007 the FDA issued an import alert on wheat gluten, rice gluten, corn gluten, and related products imported from China, effectively banning all such products from import without confirmation that the products were free from melamine. To the best of my knowledge the alert remains in force. A later FDA finding rejected the idea that melamine could make its way into the human food supply through animal products if the animals had consumed grain or grain products contaminated with the chemical.
It’s possible that the FDA was wrong or that milk from cattle fed with contaminated grain poses a hazard different from other animal products.
Presumably, the reason that this story hasn’t received much attention here (and in the blogosphere particularly) is that it doesn’t seem to touch us directly. That couldn’t be more wrong. China is the world’s third largest food exporter (we’re the largest) and the largest exporter of food additives like vitamins, coloring, etc. Anything that’s vitamin fortified, colored, preserved, or had its texture improved probably contains substances imported from China and that’s practically everything you eat.
Despite nominally tough consumer product safety laws, China is about where we were a century ago with respect to food safety and consumer product safety generally due to a lack of objective mandates and spotty enforcement. The lack of a robust system of civil law places them at a distinct disadvantage in meeting acceptable standards.
Chinese products are here to stay. They will make their way to us either directly or through intermediaries and we’re going to need to toughen our inspection regimes to cope with that reality. Country of origin labelling down to the ingredient level while possibly useful places quite a burden on sellers and isn’t nearly enough.
This problem is emblematic of the free for all laissez-faire capitalism that is practiced in China. It is crony capitalism where the government turns a blind eye to malfeasance and officials are in collusion with companies that violate the laws. Add to that almost non-existent laws or regulations and no government enforcement of what little laws there are and no accountability to the public, this is what you get.
I think feudalism is a better description than laissez-faire capitalism but I don’t disagree with the thrust of your comment. The problem is that local officials requiring a cut of the take and, consequently, being willing to turn a blind eye to infractions is the system.
Dave, good post. It boggles the mind how little coverage this gets back home. Seems like the only thing bloggers care about are the “China threat” angles — China as a military threat or China as an economic threat.
By now, though, it seems all but certain that the melamine was added to make up for the fact that most Chinese milk is heavily cut with water to increase profit. This is pretty common; most Chinese milk is watery and lacks the cream and fat of American or European milk. From what we’ve seen so far, “contamination” in Sanlu’s stocks seems too thorough to be anything but deliberate. The jury’s still out on Mengniu and Yili, the other big companies pinpointed in the probe.
In the comments, Dave and DC Loser I’d say you’re both partly wrong. China is neither laissez-faire nor is it feudal.
Laissez-faire, as an ideal type, requires a strongly developed sense of trust and rule of law, it cannot exist in omnia bellum contra omnes conditions like those in most of China. Likewise, it’s not a true feudal situation, as the economic actors in question are independent rather than subservient, plus there is upward mobility for anyone who can scam enough or bribe enough to get there. What we’re looking at instead is a kind of gangster capitalism practiced in the periphery and among the underclass, aided and abetted by petty officials who are little removed from the warlords of the early 20th century.
Trust in China, or the lack thereof, remains the great obstacle to steady development. If you only trust your family (and this is the bottom line for Chinese), you expect others to exploit you, so in this situation you jump ahead of the pack to exploit before you’re exploited. That’s what the farmers were doing when they sold watered-down, melamine-filled milk to dairy companies.
Thanks, Matthew. I suspect that my perspective is different than most since, in the mists of the distant past, I spent some little time studying Chinese language, history, and culture. Consequently, I have a little insight into the situation but I’m not overly rosy about it, either.
Yeah, that’s what I was characterizing, imperfectly, as feudalism. The upward mobility issue is an interesting one since that’s been a feature of the Chinese system for a very long time and one that most Westerners are peripherally aware of at best.
So, why do we have free trade with China? Why do we grant them “most-favored nation” trade status? We should be slapping the biggest tariffs in history on Chinese imports, to compensate for their complete lack of safety, environment, and labor regulation.