Beijing has made no secret of its desire to see China climb the value chain and produce more sophisticated goods. But every time the word "melamine" features in a newspaper splash, the country’s manufacturing sector loses credibility internationally while its brands fail to win consumer confidence at home.
The latest food safety crackdown has seen the closure of several regional dairy producers. Some of these companies, including Shanghai Panda Dairy, were found to have allowed tainted milk powder – that had been recalled two years ago but for some reason had not been destroyed – to reenter the supply chain.
Several of the larger dairy companies have taken steps to vertically integrate their systems, with quality tests carried out at each stage from the point of milk collection to the final packaging of refined milk products. However, troubleshooting is difficult in such a fragmented industry, and those involved have said as much. Speaking after the closure of two dairy firms in Ningxia, Zhao Shuming, head of the region’s dairy industry association, noted that many smaller players simply lack the money and technology to properly test for toxins such as melamine.
This, of course, is no justification for endangering public health. Beijing had promised to step up monitoring efforts in order to prevent a repeat of the 2008 scandal that took the lives of at least six infants and left 300,000 requiring medical treatment. The fact that the melamine that resurfaced came from the very stock responsible for the last scandal makes a mockery of these efforts. It also makes a mockery of the penalties that are supposed to dissuade companies from acting in such an irresponsible manner.
In January, it was children’s jewelry with excessive levels of cadmium. In February, it was melamine-tainted milk. Who knows what will be implicated next? Beijing’s standard response is a pledge to introduce better checks and balances, but faith in its ability to act effectively is limited. Each new government campaign or crackdown is ultimately performed post-factum.
The domestic industrial psyche remains caught in a drive for profitability, not sustainability. This means that Chinese firms looking to expand their operations both at home and overseas run the risk of being undermined by questions over quality. It is a depressing notion, but as long as companies can prevail within an opaque system that allows the less scrupulous to cut corners for quick returns, knowing that their chances of being held to account are slim, nothing is likely to change.