The New York Times
by Joe Nocera
July 26, 2013
Edward Wong’s terrific front-page article in The New York Times on Friday is as good an encapsulation of the issues currently facing China and its economy as anything you’re likely to read on the subject. As it tries to move from a fast-growing, export-oriented, developing economy to a more mature economy, it keeps bumping up against problems that could prevent it from becoming the kind of economic power it so clearly longs to be. These problems are almost entirely self-inflicted.
Wong’s article was about, of all things, infant formula. Specifically, it was about how Chinese parents with connections and money scramble to buy formula abroad, even though there is plenty available in China. They hire people who will go into stores in Britain and elsewhere and buy formula for them. Or they buy formula that has been smuggled in from Hong Kong — where smuggling infant formula is now a serious crime. Mainly, Chinese parents want to ensure that the formula they are feeding their babies has never been touched by a Chinese company.
The reason is obvious. In 2008, six babies died and some 300,000 became ill after their mothers fed them baby milk products that were tainted with the chemical melamine. Ever since, Chinese mothers haven’t trusted domestically made baby milk products — starting with formula.
In fact, as I learned during my recent visit to China, Chinese consumers don’t trust a lot of Chinese-made goods. In recent years, there have been food scandals surrounding cooking oil, eggs and meat, for starters. A few months ago, according to Time magazine, three people were caught processing pigs that had died of infectious diseases. A few years ago, contamination of Chinese-produced heparin, the blood-thinner, was linked to 81 deaths. Chinese consumers don’t even favor Chinese cars — foreign models dominate the market — because they fear that someone may have taken a shortcut (or worse) that will cause the car to die.