Mon, Jun 11, 2007 page8

• Quality issues point to China's internal rot

  • By Sushil Seth
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  Despite much of the world's fascination with China, principally because of its fast-paced economic growth, things are not quite right based on reports emerging about the deepening rot across the board. In Australia, for instance, a regional grocery chain has removed Chinese-made toothpaste from its stores because of a toxic chemical normally used in hydraulic and brake fluids as a coolant and a solvent.

  It is the same chemical reportedly used in a Chinese-made cough syrup, responsible for the deaths of 300 people in Panama.

  At the same time, a well-known Australian textile importer has reportedly "quarantined eight container loads of blankets that arrived from China ... following reports that the Australian Wool Testing Authority had found levels of formaldehyde almost 10 times higher than safety limits in many other countries."

  There are also reports of cats and dogs in the US and elsewhere in the world dying from Chinese pet foods spiked with toxic chemicals.

  China's dramatic response to all this was to announce that a Beijing court had sentenced Zheng Xiaoyu (鄭筱萸), head of the State Food and Drug Administration from 1998 to 2005, to death -- as if it were all the fault of one individual.

  This is typical of China's communist political culture where scapegoats are conveniently found at the "right" time to atone for the country's systemic failure.

  It defies belief that an individual like Zheng, however high and mighty, could for seven years play havoc with China's domestic and international health without his political bosses knowing about his misdeeds.

  Now that he has become a hot potato, he is being made the sacrificial lamb to save the skins of his political masters.

  Which is not to suggest that he was not a terrible crook. The suggestion is that it is the system that fosters and promotes such characters where Zheng and his ilk are only the tip of the iceberg.

  Indeed, there is even an attempt to shift the blame on to importers of Chinese products. Lu Yuanping, a senior boss at China's food imports and exports administration, has reportedly said that 56 percent of the substandard food products imported by the US from China in a given period were "illegal products" not approved by the Chinese authorities. In other words, it was not entirely China's fault.

  Then we have the tragedy of fake milk powder leading to the death of 13 babies from severe malnutrition. According to a Washington Post investigative report, "The scandal unfolded three years ago after hundreds of babies fell ill in eastern China and became the symbol of a broad problem in China's economy."

  The problem is that: "Quality control and product safety regulations are so poor in this country that people cannot trust the goods on store shelves."

  The system is so skewed that even when an official report warns of impending disaster from climate change, it still finds that China cannot afford to slacken on economic development.

  Listing a litany of serious consequences for China's future from climate change, like worsening droughts and floods, the report however concludes that: "If we prematurely assume responsibilities for mandatory greenhouse gas emissions reductions, the direct consequences will be to constrain China's current energy and manufacturing industries, and weaken the competitiveness of Chinese products in international and even domestic markets."

  Similarly, a government survey has found that air and water pollution in the country, combined with widespread use of additives and pesticides, has made cancer the country's top killer.

  As reported by Sydney Morning Herald China correspondent Mary-Anne Toy, "The survey of 30 cities and 78 counties, published by the Ministry of Health, said deaths from cancer had risen 19 percent in cities and 23 percent in rural areas" last year.

  All those who see hope in these kind of official reports that highlight China's problems, as well as critical reporting in sections of the media on non-political matters, need to realize that without political liberalization the country's systemic constraints are too overpowering to achieve any substantive and sustainable progress.

  Therefore, Will Hutton in his book, The Writing on the Wall: China and the West in the 21st Century, is on strong ground when he essentially says that a market economy without liberal politics and free debate is basically unsustainable.

  Whether or not these are Western values is besides the point. The point is that without a transparent government accountable to the people the system will tend to collapse from within, as happened in the Soviet Union.

  As Hutton has written, "Their lack in China is increasingly showing through a myriad of dysfunctions and internal contradictions that will have to be confronted. The current economic model is unsustainable."

  James Mann, a US journalist who covered China for the Los Angeles Times, is similarly not enamored of China's economic juggernaut. In his book, The China Fantasy: How Our Leaders Explain Away Chinese Repression, he takes issue with those US policymakers who do not take kindly to any substantive criticism of China's repressive system for fear of making China into an enemy.

  These policymakers and others who support them tend to dismiss any substantive criticism of China as biased and hence "anti-China," thus arrogating to them a sixth sense about knowing the "real" China.

  While internal contradictions deepen and social unrest grows, the gyrations of the Chinese stock market are proving a dangerous challenge. Nouriel Roubini, chairman of Roubini Global Economics in New York, wrote: "There is a bubble and eventually it's going to collapse."

  "The Chinese have lost control of monetary policy and now it has reached the stock market," Roubini wrote.

  Alan Greenspan, the former chairman of the US Federal Reserve, has also expressed concern about China's economy.

  As one Australian analyst has commented: "Riots by villagers in the rural hinterland or the coastal factory zones can be isolated and suppressed. [But] widespread discontent in the big cities by investors losing their life savings could be much harder to handle."

  "It could unravel the tacit bargain between the Communist Party and the urban populations, trading off political freedom for rising prosperity," he added.

  Sushil Seth is a writer based in Australia.
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