WBE-Net Newsletter
Release
Date: 11-1-07
NY Times Gags on China's Medicine
Within
hours of each other, the New York Times and the People's Republic of China this
week released reports that painted quite
different pictures of the consumer product scandals that have rocked
China. The Times unleashed a scathing
report, alledging that practically anything goes within the Chinese chemical
and medicine manufacturing system, resulting
in everything from fake Viagra to poisoned children's cold medicines being sold
abroad...causing hundreds of deaths. Many of the products are being sold on the
Internet. According to the Times,
the making of medicines in China is riddled with fraud, bribery, adulteration
with poisons, and a government that tends to look the other way, with the
result that the health of people worldwide who use Chinese-made health products
may be at risk.
Beijing Replies: Take Two of These....
Spinning the issue quite
differently,
China put out a bulletin praising itself for cracking down on manufacturing
irregularities. Hailing its efforts as a major step for food and drug safety,
Beijing announced the arrest of nearly 800 people over the past two months as
part of a nationwide crackdown on the production and sale of tainted food,
drugs, toys and agricultural products.
The Chinese government says it has done inspections at thousands of
restaurants, food, toy and drug-making factories and food markets. One can readily understand the urgency of
China's public relations efforts. Billions of dollars are at stake. The Chinese, in fact, recently executed
their Food and Drug Administrator after convicting him of multiple crimes
including bribery and negilence.
So, What's Really Up, Doc?
These
issues remain in flux. With tens of
thousands of food, drug, chemical, toy
and other companies to patrol, there is some doubt that China can put enough
inspectors on the ground to get a quick handle on this crisis - and as the NY
Times notes, many of the suspect
companies are owned by the Chinese government itself. The central government is trying to deal
with this by increasing electronic/camera surveillance of the country's
factories and watching their activities from central monitoring locations.
Somewhere, the Grinch is Smiling
The
Chinese toy problem has many Americans (and people in other countries) worrying
if there will be enough toys to go
around for the holiday shopping season.
Lots of parents are reluctant to buy from companies like Mattel, which
get their products directly from the People's Republic. Meantime, some American toy manufacturers are benefitting from the crisis in
Toyland, and are getting a sudden rush of orders.
But Wait...There's More....
All
this may contribute to a high-level casualty in Washington. House
Speaker Nancy Pelosi is demanding the resignation of US Consumer Product Safety
Commission head Nancy Nord, because Nord is resisting Congressional
Democrats' efforts to broaden the agency's reach and powers. The Democrats want to expand the CPSC's
powers and the punishments it can hand out, largely in response to the many
recent Chinese lead-related recalls.
Nord argues that fining companies tens of millions of dollars for what
might be relatively minor violations would be bad for business and
counterproductive.
What's This Got To Do With Me?
The
great message here is the power of
integrity. Numerous Chinese are
looking at jail time because they moved goods out of their country with
carelessness and disregard. The
Chinese are definitely on the rise, but they are obviously short on quality
control. Goods stamped "Made In
USA" create a lot more confidence than those stamped "Made in
China." You, the WBE-Net exporter, are part of a powerhouse nation whose
name carries huge credibility - a great position. You can sell many goods to the ever-growing Chinese market - and
the expanding world market - and
profit. The lesson provided by
China: know your supply chain. Export
goods that are Good. You'll keep
America strong, and we won't have to be doing such a correctional dance.
