Crackpot Chronicles

The enormous concern about tainted and counterfeit products from China grows daily as new and follow-up reports reveal ever more products unfit and unsafe for consumption. Toys, OTC and prescriptions pharmaceuticals, tires, ginger, fish and more. People have been sickened and injured, children and pets have died. Huge quantities of product have been recalled. A story in yesterday’s USA Today reports that imported products failing product safety testing are often just sent to other labs which sometimes give a more favorable result. A Chinese company is threatening to sue an independent testing lab in Florida for submitting bad results to the FDA. A story in yesterday’s Wall Street Journal (unlinkable without a subscription) tries to trace the origin of Chinese ginger found to have an illegal (even in China) pesticide, to illustrate the complex and impenetrable supply chain. Popular toys and children’s jewelry are found to have toxic elements and retailers scramble to pull them off the shelves, a painful situation just before the holiday shopping season. We’re paying the high price of cheap imports.

It’s a waste of good breath to insist that the Chinese clean up their act. They’re not going to. Skimping the spec is practically a tradition in China. I met a retired Hartz Mountain (enormous American pet supply company) import quality control field service agent at the University of Maine Hutchinson Center last month at a between-class break. She told me that five years ago when she inspected a pet food manufacturing plant in Xiamen and found adulterated product and substandard procedures, the Chinese plant manager scoffed and asked her why she was making a problem. "The dogs don’t care," he told her. She said she was not surprised at the tainted dog food scandal that surfaced earlier this year. It only surprised her that it took so long.

Similarly and more recently, from the aforementioned WSJ story, a manager of the company that exported the pesticide laced ginger said he didn’t know what the fuss was about. "Chinese people have always eaten this ginger—no problem." The company, Modern Organic (which obviously is neither) had been shut down. The NY Times in a recent story on uncertified chemicals in counterfeit drugs brought up the touchy issue that in some cases, these products came from suppliers owned by the Chinese government itself.

This defiance, plus the difficulty Chinese officials have with overseeing the juggernaut of growth in Chinese export industries, makes for a slim-to-none chance that the export of substandard product will be addressed overseas. As an editorial in the New York Times recently exhorted, we’ve got to clean up our own act. Which brings me to the bright side of this infuriating issue.

When reports of tainted imports from China first hit the news, the stories were in the Business, Financial and World/Asia sections of the national newspapers. They have ascended the food chain, so to speak, to the front pages and the national TV news. (Interestingly enough, but not at all surprising, not a word of this makes the Chinese news.) The fact that the Bush administration, in what it considered to be a business-friendly move, eviscerated the Consumer Product Safety Commission, slashed its budget and personnel and put less than aggressive people in charge of it is now dinner table conversation. And that dinner table is going to serve a lot less Chinese imports—-to the extent that country of origin can be determined. (We have country of origin food labeling laws already on the books, but most are not enforced. That’s going to change, too.)

While U.S. importers rack up profits from outsourcing to cheaper overseas manufacturing, the degradation of confidence in merchandise is now rampant. With a presidential election coming up, candidates hammering on domestic policing of unsafe products and Congress prioritizing consumer safety issues, something will get done. We wonder how it got this bad, and now we know.

The economy and calculated risk of less than reliable safety standards overseas is well known among American business interests. This wouldn't have happened without the malignant neglect of American importers and the slack afforded them by our own government. They knew long before it hit the newsstands. Now it is well known to the American consumers, who are going to have to pay a little more and perhaps buy a little less if they want safer goods.

Consumers have exercised their objections definitively in the retail sector. For instance, Trader Joe’s, a very popular midsize specialty grocery chain, decided to indefinitely discontinue sales of all individual food products from China by year’s end (WSJ). Hannafords, a large New England grocery chain no longer offers fish imported from China. Fish is one of the foodstuffs that is identified by country of origin labeling and they found that there were few customers for fish from China. (I shop there; I know.) The tilapia is now from Ecuador, a dollar a pound more than the Chinese tilapia, and selling briskly. Toy stores are voluntarily decking displays with cheerful country of origin signs and even tagging sections with "Not Made in China" banners(CBS Evening News). Something is being done. Not Made in China marketing is growing:

Amazon.com store: Toys Not from China
Online Toy Store: Not Made in China

This won’t hurt the Chinese economy or its explosive growth. The fact is that food, medicine and toy exports, including components, while highly profitable, are not their most prominent exports (iron, steel, machinery and such are) and China just posted their second highest export figures in recent years. It's not about sanctioning, restricting or reducing trade with China, nor should it be. It's about enforcing better trade. It’s up to our own regulatory system and the pressure is on. That’s good news.