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Friday, May 18, 2007

The China Syndrome

Trade with China is on a collision course to a major meltdown.

On April 26 when the "Not Made in China" airport ad was posted on Crackpot Chronicles, hits on that picture quadrupled traffic here for two weeks and it continues to account for almost double the normal number of daily hits. Not mentioned, but implied in the terse accompanying text, was the growing concern over toxic pet food contaminated with adulterated wheat gluten imported from China and its effect on underlying consumer suspicions about doing so much business with China, with too little regulation on their side. And it's escalating as the pace of news accelerates.

When it came out, after China first denied, then tried to deflect the situation, that the contamination was deliberate and profit-driven, the anguish--thousands of pets died a horrible death--turned to outrage.

This month the FDA issued a warning to manufacturers and suppliers of prescription and OTC drugs, advising them to avoid using glycerin imported from China after counterfeit Chinese glycerin adulterated with an industrial solvent proved lethal to consumers in Haiti and Panama.

In today's Times, An Export Boom Suddenly Facing a Quality Crisis reports that "The former head of [China's] food and drug safety watchdog is now on trial in Beijing, accused of accepting bribes and failing to curb the growing market in fake and dangerous medicines."

Some other excerpts:
[Major food company] executives worry that another scare involving China could set off a consumer backlash against Chinese...imports and reverse a tend that has made large food makers increasingly dependent on processed ingredients from developing countries

...

The frequency of recalls of Chinese imports has risen in recent years, according to the Consumer Product Safety Commission. For instance, two weeks ago Wal-Mart announced a nationwide recall of baby bibs made in China after some of those bibs tested positive for high levels of lead.
It goes on to cite that children's jewelry imported from China was recalled due to a high content of lead.

How much of the profit from cheap imports is going to be eroded by having to police the safety of consumables? Corporate manufacturers have a huge stake in Chinese imports, and good reason to insist that safety issues can be worked out cooperatively. On May 9, Senators Durbin and DeLauro met with the FDA commissioner and the ambassador from China to hammer out the groundwork for food safety agreements. The ambassador from China? Is this a diplomatic issue? (The official U.S. government press release, replete with congratulatory blather is here)

The more significant question is how much more is the American consumer going to stand for? Consumers like saving money, but the huge profits the corporations are reaping do not make up for the loss of American manufacturing jobs. In an economy where the corporations are booming, but the middle class is hurting and the trade imbalance is monumental, there is growing resentment in the private sector and this time they're not buying globalization as an excuse. Add to that the headline grabbing safety issues and you have the makings of a perfect storm. The above-cited Times article states:
Many consumers have...told pet food makers that they want goods that are free of any ingredients from China, according to the Pet Food Institute.
It's not likely to stop with pet food. With a presidential campaign building up a head of steam, watch for predictions of regulations, quotas and trade sanctions. In Sino-American trade talks in Washington next week, there will be more pressure to revalue the Chinese yuan which keeps Chinese export prices artificially low. This has gone from kibbles to quality of life and people are mad as hell.

That airport ad by an independent American furniture maker in Maine was a small sign of a rapidly spreading ground-up backlash against Chinese imports. The sound of trade with China has become a rapid fire tattoo of other shoes dropping.

UPDATE
more stories:
China Investigates Contaminated Toothpaste ...diethylene glycol had been used in toothpaste in China for years and...producers believed it was not very harmful

Tainted Chinese Imports Common These were among the 107 food imports from China that the Food and Drug Administration detained at U.S. ports just last month, agency documents reveal, along with more than 1,000 shipments of tainted Chinese dietary supplements, toxic Chinese cosmetics and counterfeit Chinese medicines.

For years, U.S. inspection records show, China has flooded the United States with foods unfit for human consumption. And for years, FDA inspectors have simply returned to Chinese importers the small portion of those products they caught -- many of which turned up at U.S. borders again, making a second or third attempt at entry.

Chinese Catfish Banned in 3 States
Chinese Catfish Banned in Ala., Miss. and La. Over Antibiotics Use
MOBILE, Ala. (AP) -- Chinese catfish treated with a banned antibiotic have been shut out of three Southeastern states over food safety issues.
The U.S. catfish industry, which is threatened by China's low prices, has praised the move, but it is viewed as political by importers.

Alabama Agriculture Commissioner Ron Sparks last month issued the "stop-sale" order after tests conducted by the state found what he described as dangerous levels of a banned antibiotic -- fluoroquinolones -- in 14 out of 20 catfish imported from China.

// posted by Ellen @  07:51   //Permalink// 
Ellen says hey
Mainer, New Yawka, Beijinger, Californian, points between. News, views and ballyhoos that piqued my interest and caused me to sigh, cry, chuckle, groan or throw something.


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