Dangerous Chinese goods: Will tight controls elsewhere see more heading to America?

It can't have escaped the attention of most English speakers that, over the year or so, there has been a growing furor in the US over the state and safety of Chinese products, and throughout this time Little has changed except for the nature of the goods about which there has been concern. First it was concerns over seafood and farm produce, now its was concerns over toys and other consumer goods. All of which America have been the subject of intense media scrutiny.

For the most part, the big media have placed the blame on China and the Chinese system. Stating that Chinese businesses are prone to cutting corners and to ignore what scant health and safety regulations exist, and that Beijing has failed in its duty of care to US consumers by allowing such violations to happen time and time against.

However, according to some China watcher, while China must indeed shoulder blame for allowing violations to happen, a large proportion of the fault must also lie with on American shoulders. Specifically on the openness of the American market and Washington's reluctance to close the holes that exist in its borders as far as consumer goods and agricultural produce are concerns.

State of Play?

Under America's current system companies are, for the most part, free to source goods from where ever they deem commercially viable. There are few regulations limiting who they can do business with, mandatory inspection state/federal of imported goods and produce is minimal, and companies across the board are often allowed to carry out their own inspections and to maintain their own scrutiny standards with those operating in sectors such as the children's toy sector often being allowed to preform their own recalls of defective or dangerous goods independently of state notification, and without the risk of censure for allowing potentially harmful goods to come to market.

Companies are also similarly free of legislation that could hold them accountable for the actions of their overseas partners; Allowing them to freely do business with companies that cut corners or which violate the rights of their employees; thus giving them little or no incentive incentive to monitor their trading partners, and allowing them to simply switch to a new supplier - without official consiquence - if their old one is found to be wanting.

Resistance to Change?

In response to safety concerns the response of US companies has been to criticize Beijing for failing to monitor its exporters, and to call on it to introduce tighter legislation domestic. However, during the same period, US companies have actively lobbied Washington not to increase the monitoring of imported goods, and not to introduce tighter domestic legislation.

For its part, Washington has followed suit. Calling on China to prevent faulty or dangerous goods from leaving China, but ruling out domestic action to prevent dangerous or faulty goods from entering America.

Both Washington and US companies have cited additional time/cost overheads as being behind their reasoning. Stating that any increase in monitoring or legislation would prove burdensome. Thus forcing companies to put prices up,and damaging their competitiveness in the wider market.

To some extend such assertions are correct. Increased legislation and monitoring is burdensome and can both reduce competitiveness and force price rises.

As an example, in 2006, Japan; one of China's largest trading partners, introduced a two-party agreement with China under which Beijing agreed to monitor its spinach exporters and to award special export permits to those who complied with Japanese safety standards, while Tokyo agreed to import only from those growers. Every shipment was also agreed to undergo mandatory quality checks at Japan's expense.

On the up side, according to Japan's health ministry, the scheme has succeeded in reducing the risk of imported spinach containing pesticides or other harmful substances to almost zero, and has proven so successful that Tokyo plans to expand it to cover many other imported foodstuffs. It has also generated a guaranteed market for certified spinach growers in China. Allowing them to plan and invest for the future, giving them the certainty that they need to raise the working standards of their employees, while forcing unscrupulous or negligent exporters/growers out of the Japanese export market.

On the down side, the scheme has also added approximately $160 to the total cost of each spinach shipment entering the country from China.

Comparison?

Under this scheme, and Japan's food safety regime as a whole, Japan's food safety center in Yokohama alone carried out some 30,000 food safety inspections during 2006. In contrast, only 10,000 equivalent checks were carried out for the entire of the United States during the same period.

Overall, Japan inspects 10 times more of its food imports than the US. Of 203,001 samples inspected by Tokyo during 2006, approximately 1500 were found to fall outside of Japanese safety standards. 500 of which were found to have originated from China.

A Warning?

Ironically, Japan's introduction of tougher import screening on food produce has lead Chinese exporters to look elsewhere. specifically at less regulated markets with less stringent safety standards - such as those found in the US - and it's not just spinach exporters.

As such, some China watchers are now warning that if places such as Japan and Europe tighten their import regimes and make domestic companies more accountable for the goods that they import, while America does not, the US could well become a dumping ground for products that won't pass border inspections elsewhere.

tags: china  america  japan  toy  consumer  safety  

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