Bill Emmott - International Author & Adviser

Article

Dangerous milk from China’s Communist Party
Ushio - November 2008

Will food products made in China ever be safe? All countries have occasional scandals concerning badly made or deliberately adulterated foods and other products. Even Japan has had its share of scandals, even in modern times. But China sees to have rather more scandals than most. The latest is not just a scandal but a tragedy: as a result of drinking adulterated baby-milk formula, four babies have died, 13,000 have been taken to hospital and 53,000 are reported to have fallen ill.

            In China, as in India, all such numbers tend to be large, given the size of the population. It is easy to be shocked by large numbers. But this baby-milk contamination is just the latest in a long series of such scandals in China, all of which follow the same pattern.

The pattern begins with early evidence of unsafe, criminal behaviour; then the evidence is covered up, with collaboration by government officials; it eventually emerges, with tragic consequences and public anger; the Chinese government then promises to tighten up its controls to make sure it doesn’t happen again, and someone resigns or is punished; but then nothing really is done, and further scandals occur, repeating the cycle all over again.

Earlier scandals in recent years involved such things as lead paint in children’s toys or poison being found in dumplings exported to Japan. The baby-milk scandal began with one company, Sanlu, of which it is noteworthy that the chairwoman was appointed by the provincial Communist Party. Information about the dilution of milk using melamine reportedly first appeared in 2005. City officials in the city where the company is based seem to have suppressed news about what was happening.

Only once the four babies died was any action taken, starting with disclosure in the Chinese press—but even that disclosure did not take place until after the Beijing Olympics were safely over. It was not considered appropriate to publish disturbing or destabilising news before or during the Games. It would have hurt China’s image, or even stirred up public anger at a sensitive time.

Having at first seemed to involve just one company, the scandal has since widened to include 21 other companies, including the biggest in the business, Yili, Mengniu and Bright. All have been found to have sold products containing an industrial chemical, melamine, which had been added to conceal dilution with water, both by reinforcing the milky appearance and by bolstering the protein content. Melamine is poisonous, as it damages the kidneys of people drinking or eating it. Babies, naturally, are most vulnerable to this kidney damage.

The motive for the adulteration is, of course, to lower costs and increase the profit margin. But why now? The reason appears to be new tighter controls on pricing of baby foods introduced by the government which squeezed profit margins.

Now that the news is out, heads have rolled. The mayor of Sanlu’s local city has resigned, as have the local Communist Party leader and the head of the national department for quality supervision. A lot of other people have been arrested. As well as the domestic furore, damage has been done to China’s international reputation, with scores of countries testing China food products and withdrawing some from sale.

This will not damage China’s economy very much, for food exports are tiny compared with the country’s exports of manufactured goods such as computers and DVD-players. But reputation does matter to China, especially as the country has been trying very hard to become friendlier with its neighbours during the past 10-15 years. Neighbours who have to introduce special tests on Chinese dairy products are not, however, likely to feel very friendly towards China.

Yet the important question concerns not the immediate actions and consequences but the long-term ones. Should promises of “this won’t happen again” be taken seriously this time, given the magnitude and tragic nature of the scandal?

It looks unlikely. For the central weakness of China’s regulatory system is the fact that regulators, the Communist Party and companies themselves are all so intertwined. These scandals occur because party officials allow them to, or even get involved in causing them themselves. The conclusion is clear: until the Communist Party system itself is reformed, these scandals and tragedies will keep on occurring.

            By “reform” I do not necessarily mean democracy or overthrow of the whole political system, though that would be desirable for other reasons. From the narrower point of view of health and safety rules, what is needed is a reform that separates government from active involvement in pricing, in company management and in the control of media and other information sources. In other words, the body that is responsible for enforcing the law needs to be separated from the bodies that are involved in breaking it, in setting up incentives to break it, and in preventing criminal behaviour from being publicised.

            The question now is whether public anger over baby-milk adulteration will be sufficient to force any real changes in the Chinese law enforcement system. The fact that this scandal involves babies, and so society’s most vulnerable but cherished group, might argue for optimism.

Yet given the way the Chinese political and economic system works, the public anger would have to be truly huge in order to have any real impact. For nothing is really likely to change as long as the rule-enforcers and the rule-breakers are part of the same party and government organisations, and as long as the media is not free. And if that were to change it would require truly radical measures: it would involve much more than just getting officials to do their jobs properly. The media would have to be made free; new independent agencies would have to be set up with the power to act even against companies owned by the government and run by Communist Party officials. This is highly unlikely to happen in the near future.

So the best assumption is that there will be plenty more scandals. Be careful what you eat and drink when visiting China.


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