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Sunday, September 28, 2008

Melamine - What China Can Do

Melamine, Melamine, and Melamine. The same type of scandal happened a year ago, but then it only affected Pets in the US and some toothpaste. Now it's affecting China and getting massive publicity, and do the the huge amount of Chinese food exports recalls have spread to Sausage in Japan, to Baked Goods in Taiwan, and to the Mr. Brown Ice Coffee drink that used ingredients from China. This has hurt the positive bounce that China got in their reputation for quality with the Olympics. The space walk that China just did was overshadowed by the milk contamination scandal.

So what can China do?

Current Actions by Chinese Government:
  • Publicity inside China on this disaster, allow only trusted media to write about it. China's government for over a year had issued orders to the Chinese news media not to write about food safety issues.
  • Delete any references on the Internet in China on blogs, web sites, etc.
  • Have Chinese leadership do photo ops with victims.
  • Arrest a few people (only 12 arrested so far).
  • Fire local officials (I think 5 so far) and have head of testing resign.
  • Threaten any lawyers who try to help victims to sue.
  • Run articles saying how milk remaining on shelf is OK.
  • Run stories about how more testing is being done and this only happened at large firms that were exempt from testing since the were trusted. My opinion on this - BS. Lots of corruption allowed this to happen.
Summary - Show the problem has been fixed and downplay as much as possible so can focus on more important issues. Very similar to what was done with Szechuan School Collapse disaster.

My suggestions:
  1. Allow the news media in China to report on food safety stories.
  2. Allow Chinese Media to write about corruption issues.
  3. Remove threat of retaliation from local officials on news stories.
  4. Stop censoring of Internet inside China on corruption and food safety stories. I would totally free the media, but I don't see China's leadership doing this. The problem with corruption is it goes pretty far up and includes the communist party, and the leadership is worried that more stories about corruption will hurt the credibility of the communist party.
  5. Allow food prices to be set by the market. What happened was China's milk prices were kept artificially low, so producers increased their profits by watering down the milk and then adding Melamine so it could pass the test for having enough protein. The protein test was probably put in place after several babies died due to baby formula that did not have enough protein in it in 2004.
  6. Hold local elections.
  7. Separate the local governments from local businesses. Local business leaders are often also local government officials.

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