Food Fight

June 14, 2007 Topic: Economics

Food Fight

Food safety has quickly become a flashpoint and potential hazard in U.S.-Chinese relations.

Seated across from each other at the UN Security Council, it is not diplomatic barbs, but food that China and the United States are hurling across the table. Tempers and tensions are high.

The stakes have risen since investigators confirmed that Melamine-contaminated wheat gluten from China in over 150 brands of pet food was responsible for the death of numerous household pets in the United States. This prompted the elevation of food safety to the Strategic Economic Dialogue in May with the accompanying promises of "future cooperation."

While increased communication and cooperation between the United States and China on food safety is a positive development, China's regulators face numerous challenges on the domestic front. The current tensions reflect a limited understanding in China of U.S. regulations as well as an under-appreciation of the challenges Chinese regulators face.

Weeks after the pet food incident, the United States Food and Drug Administration (USFDA) discovered that several brands of Chinese-made toothpaste contained a poisonous chemical and shocked Beijing with an import alert. Beijing subsequently diagnosed the United States as "self contradictory", in what some see as an ominous tit-for-tat retaliation, the Chinese government department responsible for monitoring trade in foodstuffs announced:

State Administration of Quality Supervision, Inspection and Quarantine calls on all local departments to strengthen inspection and quarantine of food products shipped from the United States to China. Chinese importers should also clarify food safety requirements when importing U.S. foods in order to reduce the trade risk.

China's Food Processing Challenges

Food safety in China is a complex issue that is the responsibility of ten different government departments with often overlapping jurisdictions. Central and provincial authorities frequently do not have the capacity to effectively regulate rural processors, who commonly have little capacity themselves to comply with complex regulations. Additionally, China's political and legal system is often constrained by the demands of maintaining a "harmonious society." Following the Communist Party's political lead takes precedence over the reform of sectors-the media, judiciary and environmental protection-where restructuring would improve food safety.

With an estimated 1 million food processors in China, as many as 70 percent of them are rural, small or family businesses with fewer than ten people. Increasingly, transportation and communication in China is reaching rural areas and enabling Chinese farmers to get their produce to markets both at home and abroad. As these rurally produced products reach international markets in greater volume, regulators have an increasingly difficult task standardizing safety practices.

As the economic reforms of 1979 and a closed, fragmented economy recede farther and farther in China's rear-view mirror, government regulators are playing catch-up as production decentralizes and expands. Small processors often establish themselves without appropriate documentation or technical capacity to establish safe manufacturing practices. Government attempts to regulate these private enterprises have met with mixed success, oftentimes hindered by widespread corruption-see the recent death sentence handed down to the Chinese FDA's founding director for trading drug approvals for bribes.

Conflicts of interest between central, provincial and local authorities often play out in the food sector, further limiting the government's ability to effectively police processors. Local officials frequently protect and collude with processors, stymieing regulators' attempts at oversight. Local authorities are sometimes motivated by immediate political necessities, such as ensuring increases in local employment, tax revenues and investment, rather than enforcing mandates from the province of Beijing to "ensure food safety", potentially at the expense of shutting down a factory or confiscating products from a store or distributor, which would undoubtedly cause economic hardship locally.

The Missing Pieces

Chinese society lacks several essential components that play a major role in food and drug safety in the western world. In particular, the Chinese government controls media at many levels in an effort to ensure social stability and the continued rule of the Party. Local officials have the power to hush local papers from reporting on crises, such as a food poisoning outbreak, ostensibly to "prevent panic." Predictably, delays in sharing information with epidemiologists as well as the public can seriously damage the chances of mounting an effective response to a public health incident, a lesson that was not completely learned from the 2003 SARS outbreak. Chinese media was particularly constrained from reporting on the melamine contamination incident that occurred in the United States.

Similarly, China's legal system is not independent. Chinese courts must weigh the societal and political costs of judgments against companies-doing so delicately when government ownership is involved. Likewise, China lacks a strong product liability law that places the onus of safety on the manufacturer.

Lastly, China lacks a dynamic civil society that represents the interests of processors and consumers. In the United States, associations and individuals play a vital role in ensuring product safety, particularly food processing. Consumer advocates serve as watch dogs on both manufacturers and regulators alike, a role that government officials in China have been reluctant to embrace. Chinese associations do not represent manufacturers, but instead represent and protect the interests of the government and party. Thus, unlike in the United States, manufacturers in China have no "client-focused" advocates, resulting in the imposition of regulatory laws upon unrepresented and even unaware manufacturers. Without any political-economic matrix, the Chinese authorities will have their hands full averting future domestic and international food crises.

Food fights often earn children dismissal to their bedrooms, but neither China nor the United States is a kid on the international stage, and food safety in a global economy is not child's play. Both would be advised to show a little maturity-with U.S. officials assisting their Chinese interlocutors to establish systems, transfer technologies and effectively communicate existing U.S. regulations-and keep the food on their plates, where it belongs.

Drew Thompson is the Director of China Studies and Starr Senior Fellow at The Nixon Center.