China Digital Times

SECTION: Economy

• After The Olympics: The World in 2009

  

  The Economist released its annual predictions and insights for “The World in 2009″. Here is what the magazine foresees for China’s new agenda:

  

  - Policymakers will “strive to prevent economic growth from slowing too fast while curbing inflation” in accordance with the current stock market decline

  - The 20 year anniversary of the Tiananmen Square uprising will bring new demands for political change, both internally and externally. Internally will be the official 30 year commemorations of China’s “reform and opening” policy, and externally we’ll see hints at new reforms for the state media.

  - With the conclusion of the Olympics, there may be some political loosening. With the burden of feeling “constrained by a need to demonstrate a unity or purpose” alleviated, “the result could be a year of greater social turbulence.”

  - China’s relations with Taiwan will continue along its current path with “Taiwan’s President Ma Ying-jeou continu[ing] the efforts he has been making since his inauguration in May 2008 to defuse tensions with the mainland.”

  - Relations with Tibet will be particularly restless. As the 50th anniversary of the March 10th uprising comes closer, The Economist predicts there will be “recriminations” between China and the West if China cracks down on Tibetans’ efforts to mark the date.

  - January 1st will mark a new law taking effect that requires industries to cut water consumption and use more “clean energy” to promote a more “pro-green” image, but it will be “will be very reluctant to pledge any specific targets for cuts in carbon emissions” at the November 2009 meeting in Copenhagen.

  - China, with the help of Russia, may also send a probe to Mars in the later half of 2009.

  » Read more
  • November 20, 2008 8:55 PM

• China Calls on U.S. to Lift Ban

  

  China has requested that the U.S. lift its ban on Chinese-produced milk products, stating that the Chinese government has been successful on cracking down on melamine contamination:

  “We feel deep regret that the US insists on unilaterally taking these steps,” [Chinese Foreign Ministry Spokesperson Qin Gang] told a regular news briefing.

  “We hope the US can pay great attention to Chinese concerns, as these steps will have an effect on bilateral trade,” he added.

  “We hope the US… can lift the ban as soon as possible.”

  Meanwhile, the U.S. Food and Drug Administration has opened an office in Beijing - the first time an office has been opened outside of the U.S.  This office is intended to ensure the product safety of China-made exports destined for U.S. markets, and will be staffed with FDA food experts and inspectors:

  “In the past we have always been at our borders to try and catch things that were not safe or did not meet our standards,” US Health and Human Services Secretary Mike Leavitt said at a ribbon-cutting ceremony to mark the opening of the Beijing office. “In the future our new strategy is to build safety into products at every step of the way.”

  After meetings with Chinese officials on Tuesday, Leavitt said both countries would work on a joint initiative to use better technology for detecting contamination, demand greater corporate responsibility and increase sharing of data and information.

  The Health and Human Services (HHS) press release states:

  “We’re opening up a new era, not just new offices,” [HHS] Secretary Leavitt said. “By having a presence in other parts of the world, we can work more closely with manufacturers and other governments, better share best practices and further ensure that quality and safety are built into food and consumer products at the point of manufacture.”

  “A permanent FDA presence in China will help us address the challenges presented by globalization,” Commissioner von Eschenbach said. “We look forward to working with the Chinese government and manufacturers to ensure that FDA standards for safety and manufacturing quality are met before products ship to the United States.”

  The FDA has plans to build offices in Shanghai and Guangzhou, as well as cities in India, Latin America and Europe.

  See also the news video US to create FDA Office in Beijing.

  For more information, see CDT’s past posts on food safety.

  » Read more
  • November 20, 2008 1:52 AM

• Macro Indicators Positive Despite Flagging Growth

  

  Despite the acknowledged slowdown to single-digit GDP growth, some economic indicators suggest that the domestic Chinese economy is faring moderately well amidst the global financial turmoil, including the latest released figures on consumer spending, FDI and inflation.

  From the AP:

   

  China’s retail sales remained robust in October, a positive sign for Chinese leaders who want to boost consumer spending to insulate the economy from a global slowdown.

  Retail spending rose 22 percent in October from a year earlier, the National Bureau of Statistics said Wednesday. That was down from September’s 23.2 percent growth but still one of the strongest months on record.

  In addition to consumer spending, FDI was also up on an annualized basis.  From Bloomberg:

  Foreign direct investment in China climbed 35.1 percent to $81.1 billion in the first 10 months of 2008 from a year earlier.

  [...]The government’s Nov. 9 pledge to boost spending on housing and infrastructure to sustain growth may encourage overseas investors to keep channeling money into the fourth- biggest economy. PepsiCo Inc., the world’s largest snack maker, said it plans to invest $1 billion in China in the next four years to increase production and sales.

  Inflation has steadily decreased, and it was recently announced by the National Bureau of Statistics that China’s inflation rate fell to 4 percent in October, consistent with this forecast from TIME:

  After wrestling to control rising inflation over the past 18 months, the government reported recently that China’s Producer Price Index “declined sharply to 6.6% year-on-year in October, from 9.1% in September,” Ulrich of JPMorgan wrote in her report. She noted that the Consumer Price Index, which will be released this week, will also moderate further from last month’s level of 4.6%, which was the fifth successive monthly decline.

   

  

  Farmers in Shanghai unload shocks of chives at the marketplace.

   

   

  Tempering expectations of the $586 billion stimulus package’s efficacy, TIME also reports that:

  “I think that we’ll see a couple of weak quarters in 2009,” Simpfendorfer says. While the size of the package was welcome, “it’s the speed of its implementation that is really important,” he says. “My concern is that the contraction in demand will take place before the fiscal policies have time to take effect.” To an economy heavily dependent on exports, that period between stimulus and response could have significant implications. With up to 2.5 million migrant workers in the Pearl River Delta forecast to lose their jobs in the coming months as the worldwide economic crunch deepens and many already flooding back home to their villages, some political analysts have expressed concern that social unrest in rural areas could worsen.

   

   

  » Read more
  • November 19, 2008 1:06 PM

• China To Impose Fuel Tax “Very Soon”: Paper

  

  From Reuters:

  China will impose a long-awaited fuel tax “very soon,” the head of National Development and Reform Commission’s (NDRC) Energy Research Institute said in comments reported on Tuesday by the China Daily.

  “The announcement will come very soon, and actually specific plans have already been suggested to the government long ago,” Han Wenke, director general of the research body, was quoted as saying.

  More than a decade in the works, the fuel tax — experts expect 25 percent or more will be heaped upon retail pump prices — is meant to replace road tolls as a means to fund highway construction.

  » Read more
  • November 19, 2008 4:17 AM

• China’s Environmental Retreat

  

  From Washington Post:

  In February, the Fuan textile factory became one of the first major casualties of China’s anti-pollution campaign when the multimillion-dollar company was shut down for dumping waste from dyes into a neighboring river and turning it red.

  But as the country’s economy began to cool this fall and job losses mounted, the company was resurrected. Encouraged by the government, Fuan changed its name, moved to a new location and quietly reopened.

  With the global economy at the edge of recession, China appears to be turning away from previous pledges to improve its record on environmental protection. In this, China is hardly alone: A climate-change proposal in Europe that a few months ago seemed like a sure thing has now divided the continent because of its anticipated expense, and worldwide, money for the development of renewable energy sources has been drying up.

  » Read more
  • November 19, 2008 4:01 AM

• APEC Economist: India and China Key

  

  The Associated Press is reiterating China and India’s role in the global economic downturn, citing a top Pacific Rim trade economist and the International Monetary Fund in the positive impact of China and India’s growth. The IMF claims that developing nations, including China and India, will account for “the world’s entire projected 2.2 percent overall growth next year.”

  The IMF estimates that the economy from rich nations will grow by a mere 0.1 percent while the developing world is expected to grow almost five percent. China and India have grown at near double digit rates respectively, and the two countries hold 40 percent of the world’s population. Although the growth rates in both countries are expected to slow, “the production drop [will] be far softer than [in] rich countries” because China and India have the world’s largest cash reserves.

  China and India are members of APEC, and at last week’s G-20 summit in Washington DC both expressed a demand for “greater say in world economic and political forums.” The summit saw G-20 presidents agree to “take whatever action necessary to stabilize the financial system.”

  » Read more
  • November 18, 2008 8:50 PM

• Chinese Nationalism and Its Impact on Brands

  

  A recent study by Ogilvy Group China & Millward Brown ACSR China looks at Chinese nationalism from the angle of consumer culture. The research based its data on events leading up to the Beijing Olympics in 2008 and the role of the internet in cultivating nationalistic sentiment. Media reports:

  The research, which canvassed a total of 900 Chinese citizens aged 16 to 45, found that the web had been the most significant source of awareness of the recent hostility towards foreign companies such as Carrefour and CNN. The findings showed that the gap between awareness of and participation in an event was narrowed online, with almost two-thirds of respondents stating they had taken part in the nationalistic ‘I heart China’ campaign on MSN at the time of the furore.

  In times of nationalistic fervour, Chinese brands were likely to see an increase in purchase intent among consumers, the survey suggested. A section of the participants, when reminded of the recent nationalistic activities and asked which brands they were likely to purchase in the near future, showed less interest in Carrefour and Louis Vuitton (respectively 7 and 8 per cent less than their counterparts not caught up in the situation). Meanwhile, Chinese skincare brands such as T-Joy and Dabao became more appealing by 7 and 8 per cent, respectively.

  But while Chinese consumers appear to favour Chinese products in principle (84 per cent vowed to increase their consumption of domestic brands), the survey showed quality and price to be the most important factors in a purchase decision, above national origin. Particularly for higher-priced goods, foreign brands were shown to be preferred. Knowledge of the origins of certain brands also appeared to be shaky: 26 per cent believed Olay to be Chinese.

  CDT had an earlier post on how brands have tried to use nationalism in their favor.

  Conversely, that can also backfire. In Adidas’s case of using the national flag on their products, resulted in a recall of products after a protest in March of this year. From Forbes:

  Chinese reporters and consumers rose to the defense of its national flag shortly after a news report last week in Hong Kong’s Mingpao daily newspaper, saying that Adidas might have violated Chinese law, which forbids the commercial use of its national flag. The news prompted a search by reporters in China, from Shanghai to Shenzhen to western Chengdu city to see if they could find the offending merchandise on sale in China as well, only to confirm it was not, yet. But one reporter managed to confirm with Adidas’s outlet in Chengdu that the apparel and accessories had been planned for sale there in April.

  

  Adidas appropriates the Chinese flag and comes under fire (photo courtesy of All Roads Lead to China)

  Read more on the Olympic publicity on CDT.

  The entire research report can be viewed on WPP.

  See also perspectives on Design News and a summary on Golden Brands China.

  » Read more
  • November 18, 2008 2:15 PM

• Chinese Automakers May Buy GM and Chrysler?

  

  With the U.S. auto industry in the midst of a crisis, Chinese media reports are saying that Chinese companies may buy up two giants, Chrysler and GM. From TheTruthAboutCars.com:

  Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today… The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad. And why would they do that?

  It is worth noting that this plan has not been mentioned widely (or at all) in the U.S. media reporting of the automakers’ current troubles. This article, from AP, talks about decreased sales in China as being one more nail in U.S. car makers’ coffins:

  The big automakers’ ability to weather the crisis hinges on drawing jittery customers like Yang back into dealerships, especially in China.

  The urgency is particularly acute for America’s big automakers — GM, Ford Motor Co. and Chrysler LLC — which have been battered by the U.S. economic meltdown and are lobbying the federal government for a $25 billion bailout that looks increasingly murky. GM has said it could run out of cash by year’s end without government aid.

  » Read more
  • November 18, 2008 2:01 PM

• Chinese President on Cuban Visit

  

  President Hu Jintao has arrived in Cuba on his tour of Latin America. China is the island’s biggest trading partner after Venezuela. From the BBC:

  China has seen its trade with Latin American nations climb from $13bn in 2000 to more than $100bn in 2007.

  “My visit is aimed at increasing friendship and co-operation between our two nations, and working together with our Cuban comrades to build a promising future,” Mr Hu said in a statement. …

  China, a modern-day economic powerhouse in a world of financial uncertainty, sees Cuba with its need for investment and political support as an important ally in its long-range plans to strengthen and expand its ties with the rest of Latin America, he adds.

  After Cuba, Hu will head to Peru for the Apec (Asia-Pacific Economic Co-operation) summit in Lima. The AP’s Frank Bajak reports that China isn’t letting the global financial crisis get in the way of its ambitions in Latin America:

  China’s trade with Latin America was $102 billion last year, but already in the first nine months of this year it reached $111 billion, Chile’s ambassador to Beijing, Fernando Reyes, told The Associated Press. That compares with U.S.-Latin American trade of $560 billion last year.

  Hu’s government insists its interests are not just commercial. In its first policy paper on ties with the region, China’s foreign ministry suggested it might help Latin American countries reduce their debts. It also said it wants to help Latin American nations narrow the gap between rich and poor.

  To that end, China last month bought into the Interamerican Development Bank with a very modest $350 million investment for social, anti-poverty related projects. That compares to Washington’s 30 percent stake in a fund that exceeds $100 billion.

  The money may be small, but the symbolism is big: The United States isn’t the only world power Latin America can turn to for help.

  » Read more
  • November 17, 2008 9:41 PM

• No Layoffs Without Permission in Shandong, Hubei

  

  Tan Yingzi reports in the China Daily:

  Firms in Shandong and Hubei provinces that want to lay off 40 or more workers have been told they must first apply for approval from their local human resources and social security authorities, the Legal Daily reported on Sunday.

  The order, released last Tuesday, is an amendment to the national labor contract law, which came into force in January and states that all companies that want to lay off more than 20 employees must first get approval from their labor unions and report their layoff scheme to the labor authorities.

  Provincial authorities have now decided to launch the order in response to the global financial crisis, and in the wake of several cases of company bosses from Shandong, Guangdong and Zhejiang, fleeing their responsibilities and leaving workers stranded, Wang Kexing, head of the unemployment and social insurance section of the Shandong human resources and social security department, told China Daily Monday.

  » Read more
  • November 17, 2008 9:11 PM

• Bank of America to Pay $7 Billion for China Construction Stake

  

  Bloomberg reports on Bank of America’s decision to invest $7 billion into China Construction Bank:

  Bank of America, which is buying Merrill Lynch & Co., will boost the stake in China’s No. 2 bank to 19.13 percent from 10.8 percent, the Charlotte, North Carolina-based lender said today. It will buy shares from China SAFE Investments Ltd., a state investment arm that is the Beijing-based bank’s biggest stakeholder.

  Bank of America isn’t funding the purchase with proceeds from the government’s Troubled Asset Relief Program, or TARP, said spokesman Scott Silvestri. Merrill received $10 billion through the Treasury’s $250 billion bank-rescue package. …

  Bank of America first invested in China Construction in June 2005, buying a $3 billion stake before the lender was publicly listed. It invested another $1.9 billion in June. The value of its holding almost tripled, to $14.5 billion, as of Sept. 30, a regulatory filing showed.

  » Read more
  • November 17, 2008 8:57 PM

• Team ‘Chimerica’

  

  Niall Ferguson, a professor of history at Harvard University, is the author most recently of “The Ascent of Money: A Financial History of the World.” He writes in the Washington Post:

  Future historians, I suspect, will look back on Saturday’s anticlimactic G-20 gathering in Washington less as Bretton Woods 2.0 and more as a rerun of the London Economic Conference of 1933. Back then, representatives of 66 nations completely failed to agree on a concerted international response to the Great Depression. The fault lay mainly with the newly elected U.S. president, Franklin D. Roosevelt, who vetoed European proposals for currency stabilization.

  This time around, it wasn’t the newly elected Democrat but the outgoing Republican who wielded the veto. Even before his counterparts reached Washington, President Bush made it clear that recent events had done nothing to diminish his faith in free markets and minimalist regulation. Over the weekend, it was the United States that resisted European calls for a new international regulatory body, opposed significant redefinition of the International Monetary Fund’s role and showed no interest in the idea of a global stimulus package.

  Show on map

  » Read more
  • November 17, 2008 8:50 AM

• Baidu’s Search Methodology Controversy Gets Heated Up as CCTV Steps In. (Updated with Videos)

  

  When the Sanlu scandal was first revealed two months ago, it was rumored that China’s search engine giant, Baidu accepted 3 million RMB from Sanlu to block out search results that consist negative images of the notorious milk company. Since then, Baidu has become a target of online criticisms. Recently, a sales plan leaked from the inside validifies the claim that Baidu does try to manipulate and censor search results for commercial purposes.  The company is now also facing an anti-monopoly lawsuit from Qmyyw.com, a website established by a Hebei medicine company.

  Originally published in tianya, a post reveals two screenshots of a sales plan ppt that Baidu offers to some car company. The screenshots show that Baidu provides value-added services that offer PR protections such as deletion of negative news, blockout of search links, and manipulation of topics in Baidu tieba (Baidu Post Bar).

  The original ppt can be founded here (part1) and here (part 2).

  Also from StreetInsider.com,

  Baidu.com (Nasdaq: BIDU) will face a RMB174.4 million lawsuit for manipulating its search results for medical information site www.qmyyw.com.

  Qmyyw.com’s suit claims that Baidu search results now exclude Qmyyw.com’s content following the company’s reduction in its payment for Baidu’s bid ranking service. Citing reports from the Southern Metropolis Weekly, the rumor points out that Qmyyw.com purchased a number 3 spot on Baidu’s site for RM89,000 in March, but after the site lowered its payment in July, its visits fell from over 88,000 hits to 18,340 hits in just a month.

  Baidu has now claimed that its “search results are not influenced by its bid ranking service”.

  The “ranking bid” search methodology has long been controversial.  According to Jiefang Daily (in Chinese), the Hebei provincial government once offered 5600 RMB “bidding fee” to Baidu to put the government website on the top of the search results page that comes out the keyword “zhengfu wangzhan (government website).” However, because netizens then started to criticize the credibility of the government website, the deal was eventually cancelled. Ranking bids are very common in Chinese search engines. As a result, the credibility of search results is highly challenged. According to Beijing Morning Post (in Chinese), a netizen complains that when she searches the keyword “Diabetes mellitus” in a Chinese search engine, two of the ten results on the first page link to websites selling fake drugs.

  Online Marketing in China. SEO. also has this earlier detailed analysis of how baidu’s paid search program differs from Google’s.

  1. The paid search and the organic results are not clearly divided. You will only notice the difference by the small gray underlined term next to the displayed URL. 推广 means it is paid search, 百度快照 means organic search result.

  2. All paid search results will be placed before the organic search results. That means, if 20 customers buy the same keyword, the first organic search result will be found on page three. The price is based on a bidding process. Not only the CPC but quality factors like landing page evaluation will influence the position as well.

  3. The ads in the right column are no CPC-based ads. They are fix-priced for one whole year. Position no. 1 to no.3 have the same price and rotate among each other. Position no. 4 to no.10 are cheaper than no.1 to no.3 and rotate as well. If the position is already booked, you have to reserve and wait respectively until it will become free. There is no possibility to get out of the contract before this one year ends.

  4. Once a while you might notice one or two ads with a blue banner on position one and/or two. It looks similar to Google’s blue banner, but in fact it has a totally different meaning: if you search for a keyword and there are no paid results for that keyword because no advertiser has booked it, Baidu will display ads that are similar to the keyword you entered. Example: you enter ‘keyword advertising’ but there are no paid results, so baidu will show two ads for the keyword ‘advertising’ with a blue background.

  The story is getting more interesting as CCTV just covered Baidu’s “ranking bid” methodology in its two recent “News 30 Minutes” programs.  In the first day’s program, CCTV covered how fake drug websites put their links on the top of corresponding Baidu search results pages through “bidding.”  In the second day’s program, CCTV’s reporter interviewed two selling representatives inside the company. A few points are worth mentioning.

  1. The more a website wishes to pay, the higher its ranking will be shown on Baidu’s search results pages. A typical bid for the keyword “性病 (venereal disease)” is 16.56 RMB per click to put a fake drug website No.5 on the search results ranking list.

  2. Baidu does not censor the credibility of its bidders seriously. A sales representative admits that in a case where a medicine company does not have a license for its drug product,  after the company photoshoped a fake license, its website then easily passed Baidu’s censorship.

  3. Baidu blocks out those websites who decline to apply for the “ranking bid” service.  Qmyyw.com would be a typical example.

  4. Baidu claims to cover 95% of Chinese netizens, and 80% of its revenue come from “ranking bids.”

  Comments translated from the blog of 郭建龙 Guo Jianlong, the reporter who first started the whole investigation of Baidu’s “ranking bid” methodology:

  Even though Baidu is being accused of the suspicion of monopoly, I still want to propose a question: which powerful state-owned corporation isn’t using its monopoly to exploit the living of our ordinary people?  However, our media’s circumstance is too bad; there is completely no freedom to say.  Who dares to say bad things about the government? Who dares to touch dragon’s squama?  Who dares to question those state-owned monopolies? You need to know that if you don’t handle your question well, you’ll be severely punished.  Caijing shibao (Financial Times) got shut down only because of one article on ABC. Just under such circumstance, media becomes to bully the weak and fear the strong. Since it does not dare to touch state-owned corporations, then it finds an easy target and puts all its criticisms toward Baidu. In fact, Baidu is far better then those corporations. Think about the time when China Mobile punished those service providers; who dares to fart? Take another recall that when the government proposed the 4 trillion stimulus, besides saying good, who dares to provide counterviews? With regard to anti-governmental monopolies, what our media basically do is: when the government leaves us a shit and says “eat it,” media then starts to discuss whether to fry it to eat or stir-fry it to eat; but noboday dares to discuss why and for what to eat.

  From my point of view, Baidu is far better than CCTV. Therefore, after CCTV, such a dirty monopoly, also participates to attack Baidu, I decide to temporarly give up.  By the way, just to add one more ingredient, CCTV’s report actually uses the same cases I used in my early articles, especially that dirty hospital case. Are they not even willing to find a case by their own?

  Who made Baidu’s blockout an advantage? In the first place when Google propagated to do no evil and refused to block out searches of prohibited keywords, the result was that Google got blocked out. Baidu said: “we submit; we, from the technological perspective, promise to not let what the government dislikes appear.” Then, it got favoured.  However, as the technology now becomes mature, if they can block out what the government dislikes, surely they can also block out what those other companies dislike. It is just that government at that time who fosters today’s controversy. Now, it shouts and says no to Baidu. It is like what is said in the Chengyu “the success or failure of the affair is all due to Xiao He” and just appears ridiculous to me.

  Also, one interesting piece of humor translated from cnBeta:

  the reporter: “the more I wish to pay, the higher my ranking will be?”

  Baidu: “yes!”

  the reporter: “I’m from CCTV!”

  Baidu: “no problem, as long as you pay more than Hunantv does.”

  (Hunantv, 湖南卫视, is a local satellite TV station in Hunan province, who has placed serious challenge to CCTV’s popularity in recent years.)

  For more on China’s search engine market, please see the CDT tag “search engines.”

  » Read more
  • November 16, 2008 11:12 PM

• China’s Huge Poverty Gap Slowing Growth, UN Says

  

  The Guardian reports on the latest United Nations Human Development Report:

  It tracks the vast and increasing gaps between rural and urban areas and regions of China - warning that differences in income are matched by disparities in social welfare, education and elderly care.

  While Beijing and Shanghai have reached the development level of countries such as Cyprus and Portugal, provinces such as south-western Guizhou are comparable to Namibia or Botswana.

  The Human Development Report argues that pressing ahead in providing basic healthcare, education and welfare to all Chinese citizens will boost the country’s economy in the face of the global slowdown.

  Read the UNDP report here.

  » Read more
  • November 16, 2008 9:25 PM

• US Issues Alert Over Chinese Melamine

  

  The U.S. Food and Drug Administration has issued an alert after discovering melamine and cyanuric acid in Chinese food imports:

  The new alert from the US Food and Drug Administration (FDA) covers a range of Chinese products including drinks, sweets, baby and pet food.

  It also allows US inspectors to seize any Chinese products suspected of being contaminated.

  Any food items from China that contain milk will be stopped at the border and tested by U.S. authorities:

  Companies in the United States have recalled several products, including nondairy creamer and a type of candy, which are primarily sold in Asian markets, because of melamine concerns but to date the contamination here was not thought to be widespread.

  “We’re taking this action because it’s the right thing to do for the public health,” said Steven Solomon, an FDA deputy associate commissioner…

  The FDA routinely blocks imports of individual food products, but it is rare for the agency to block an entire category of foods from a particular country. Last year, the FDA blocked five types of farm-raised seafood as well as vegetable protein from China because of repeated instances of contamination from unapproved animal drugs and food additives.

  The Chinese government is still trying to repair domestic and international faith in Chinese food products.  Earlier this month, two milk inspectors for Mengniu, one of China’s largest dairy companies, were badly beaten during a safety check at one of their supplier’s:

  “According to an initial analysis, this incident was triggered by (Li’s) [the inspector's] decision that this truck’s milk was not in compliance,” it quoted an unnamed Mengniu official as saying.

  Li and another inspector, Zhang Liwei, were set on by a group of about five club-wielding men as they left work later that day.  Li was badly beaten, suffering numerous injuries over his body, including fractured vertebra, and was in a coma for “a long time”, [the China Youth Daily] said, without specifying Li’s current condition.  Neither victim could identify the milk supplier nor the attackers as both inspectors had only recently been rotated to Tangshan.

  Police were investigating, the paper said.

  An op-ed in the International Herald Tribune looks at China’s melamine crisis from the perspective of American agriculture:

  For all the outrage about Chinese melamine, what American consumers and government agencies have studiously failed to scrutinize is the place of melamine in America’s own food system. In casting stones, we’ve forgotten that our house has its own exposed glass.

  To be sure, in China some food manufacturers deliberately added melamine to products to increase profits. Makers of baby formula, for example, watered down their product, lowering the amount of protein and nutrients, then added melamine, which is cheap and fools tests measuring protein levels.

  But melamine is also integral to the material life of any industrialized society. It’s a common ingredient in cleaning products, waterproof plywood, plastic compounds, cement, ink and fire-retardant paint. Chemical plants throughout the United States produce millions of pounds of melamine a year.

  See past CDT posts for more information on the Sanlu milk scandal.

  [Image courtesy of the BBC.]

  » Read more
  • November 16, 2008 9:13 PM