The world anxiously waits for the financial crisis to ebb as Wall Street battles its woes towards an uncertain future. Schadenfreude and panichave become very common words these days to describe what the rest of the world feels about whats happening to Wall Street and the US economy. There are no parties or celebratory bashes though, for the world is deeply concerned. There’s a lot of finger pointing going around as to whose to blame and as to where the free market economy got it wrong. One writer talks about how China got it right.
While the world is so engrossed with what’s happening in Wall Street, many seem to have forgotten that October 17 was World Anti Poverty Day. There’s one crisis that many seem to have comfortably forgotten, 3 billion people in this world are living in poverty.
The hoarding was rather ambitious given the simplicity of the circumstances. The hole in the wall below the sign did not match its extravagant claim. In fact the frontage of the restaurant was the back wall of an older, now demolished, building. Mr. Li has simply broken a door through to a covered yard, set up tables and continued his dumpling business. Ingenious perhaps but hardly suggesting blue blood. I did not see a health and safety certification but I am confident that if one had been refused, a small gift would have smoothed the path to certification. Judging from appearances I very much doubt that Mr. Li is really the dumpling King.
Mr. Li’s rather artless claim could not be considered as false advertising even in the most rigorous of regulatory environments. Unfortunately in China, the kind of confidence one has in advertising claims even by established brands is often misplaced and the supervision lax in the extreme. Until recently, I had taken a rather indulgent view of fake brands, since in the markets famous for such items, one gets no less than what you pay for. Government campaigns against the practice seemed more token than real, judging by the speed with which things returned to “normal” after the campaigns were over. For years people have been talking about the problem I did not appreciate the complexity of the issue.
A recent scandal has put the issue into a different perspective. A mysterious illness that has so far killed 4 babies resulted from wholesale contamination of the food chain. Reputable companies have been found to have sold milk powder which had been contaminated by fraudulent whole-milk suppliers. Local officials were prepared to bury the issue, and a New Zealand business partner had to go through convoluted diplomatic channels to inform the Chinese Central Government of the problem. Now a very thorough and transparent cleanup process is in play, but not before credibility in the milk supply has completely disappeared. The latest addition to those affected is Starbucks China who has very publicly announced a shift to new source for its milk products. It seems brand reputation and good enforcement of regulation are no laughing matter.
Government health standards are set centrally and are often in line with international best practice. They are rendered toothless however by endemic cronyism at the local level. In the case of the Milk Scandal, there are standards, but the petty criminality of two brothers in Hebei have undermined confidence in the national milk supply system and taken the edge of the feel-good factor engendered by Olympic successes. When the economy was less integrated, the impact of such fraud was minimal, but in a rapidly expanding and globalizing economy, small-scale corruption in the provinces can have national impact. The willingness to ignore the poor compliance record at a local level, is no longer sustainable when the consequences are so devastating.
I would bet that Mr. Li dumplings despite his claims, are not that good, but China is not going stay awake nights worrying about it. Nationally branded companies who proclaim their quality on hoardings across the country while delivering tainted product into the market place are a different matter. Of equal concern is the failure of government agencies to address the problem until pressure to do so came from the highest level. Pulling off a brilliant Olympics is not the only mark of a developed country. Brand confidence and a good regulatory framework are important also. I think I will be drinking my Starbuck’s Latte black until both of those are firmly in place.
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On the lighter side of the news on China. Despite China’s car frenzy, the Chinese still have a special place for the iconic bicycle. Associate Press reporter Elaine Kurtenbach writes about the once “King of the Chinese Thoroughfares” and provides an insight on how, the bicycle was able to survive modernity and the massive influx of American, European and Japanese cars. Follow the link to view the article (Courtesy of Associated Press)
American newsman Ted Koppel will have a four-part documentary about China for Discovery Channel and provides lessons on how Americans should actually view the emerging superpower. Follow the link to view the article. (Courtesy of LATimes.com)
As I stepped into the newest shopping Mall in our district, l began to have an uneasy feeling which only grew as I waded deeper into the subtly lit interior. Bulgari, Versace and Valentino were much in evidence, making the place like the Harrod’s of a Beijing Knightsbridge. The food hall was not quite up to London standards, but was clearly getting there and I drooled for ages in front of the deli counter before being intimidated into moving on by the assistants’ insistent invitations to make a purchase. However the uneasiness remained and eventually I left with out buying anything.Continue Reading »
