Sunday, September 16, 2007

Made in China

In trade, China's moral compass is off course

By CHI-DOOH LI
SPECIAL TO THE P-I

Since Beijing was chosen to host the 2008 Olympic Games, the Chinese government has embarked on a carefully scripted public relations campaign designed to show off China's unique brand of communism, which blends free market economics with authoritarian political rule.
illustration
David Badders

The Beijing Olympics will be the dazzling centerpiece of that PR campaign. China's rulers hope to bask in its reflected glory, silence critics of their political legitimacy and govern for decades to come in a state of political and economic nirvana.

In the midst of this self-congratulatory campaign, the steady stream of bad press during the past year on China's exports of toxic foods and defective products can be likened to the unmistakable smell of flatulence at a genteel tea party.

The Chinese government reacted by ridiculing early reports as news media exaggeration, and accusing the U.S. of drumming up pretexts to wage a trade war against China. They have since sought to deflect criticism by finding fault with U.S. exports (microscopic worms were found in wood packaging from the U.S.) and stressing that faulty food and products represented an insignificantly small percentage of total Chinese exports.

Internally, the government shut down offending factories, passed laws to tighten up food and product safety, executed the top official at the country's Food and Drug Agency and made scapegoats of other officials and businessmen. The Chinese news media have been ordered to cut down on stories of unsafe food and products and to add more entertainment and lifestyle stories.

Does this mean we can soon stop worrying about tainted food and toxic toys coming out of China? Beijing desperately wants you to think so. But the remedial measures taken so far address only symptoms of a much deeper systemic problem.

The problem exports are not just the result of a few rogue factories, regulatory loopholes and corrupt government watchdogs. China certainly has an abundance of all of the above. More disturbingly, these are crimes of the soul -- unchecked greed that breeds callous and deliberate disregard of deadly risk to other human beings -- that will need fixing by something other than what is found in China's totalitarian repair kit.

Nothing short of shoring up an entire nation's moral foundation is required here.

Consider the reports of the past year. The pet food scandal that set off the initial uproar turned out to be hardly the tip of the iceberg. Soon there were documented reports of tainted food and toxic products deadly to humans as well:

# Diethylene glycol, a poisonous industrial solvent and antifreeze ingredient, was falsely certified and exported by Chinese companies as 99.5 percent pure glycerin, a sweetener used extensively in food and drugs. The cheaper but deadly diethylene glycol was used by unsuspecting buyers in formulating cough syrup and other common remedies, causing illness and death to thousands around the world.

# Chinese-made toothpaste containing diethylene glycol was exported under brand names such as "Mr. Cool." The toothpaste is marketed to children.

# Chinese pharmaceutical companies have sold fake polio vaccines, blood protein and other drugs. International health authorities are understandably alarmed, considering that China makes 70 percent of the world's supply of penicillin, 50 percent of its aspirin and 35 percent of its acetaminophen, and dominates the global market in vitamins. Chinese companies have even sold fake baby formula, resulting in numerous infant deaths.

# Chinese food producers have used formaldehyde, industrial wax and banned toxic dyes in making candy, pickles and crackers. Foods with long expired shelf life are repackaged and sold as fresh. Many of those products are exported and sold in the U.S.

# The U.S. Food and Drug Administration banned the sale of Chinese farm-raised seafood contaminated with cancer-causing agents and chemicals that increase resistance to antibiotics. Chinese exporters have long ignored FDA warnings against use of such substances in fish feed.

# Toy trains, drums, bears, Sesame Street characters and Pixar cars made in China have been discovered to be coated with banned lead paint. The liquid encased in the toy "Floating Eyeballs" was found to be kerosene. Mattel's massive recall last month of 19 million toys made in China set off tremors of anxiety in U.S. parents. China makes 70 percent to 80 percent of the toys sold in the U.S.

# Four hundred and fifty thousand automobile tires made in China and sold in the U.S. were recalled upon discovery that they lacked a key safety feature that prevents tread separation. The defective tires have been blamed for a fatal accident in Pennsylvania that killed two passengers in a van.

Unconscionable greed is not a Chinese invention. It is an unfortunate disorder of the human condition. Nor does China hold a monopoly on fake products, tainted foods and counterfeit medicines. There is a long list of other countries of origin maintained by the U.S. Customs Service, the agency charged with intercepting such shipments at our borders.

But the sheer volume and breadth of products coming out of this gigantic trillion-dollar export machine put China in a league of its own.

China today is in the grips of what can best be described as religious fervor -- the worship of wealth. The communist government had systematically suppressed religions of all kinds since 1949, and even discredited Confucius, whose teachings undergirded China's ethical system for 2,500 years. When China emerged from behind a tightly drawn bamboo curtain in the 1980s, it was in a spiritual and moral vacuum.

Even Chairman Mao Zedong, who was the closest thing China had for a deity in the 1960s and 70s, was relegated to a dark closet by Deng Xiaoping, the ideological pragmatist who brought China out of its isolation from the West.

Deng's introduction of free market economics to 1.2 billion people, whose entrepreneurial spirits had been suppressed for decades in the straitjacket of an inefficient controlled economy, resulted in a frenzy to make money as quickly as possible, no holds barred. His "To get rich is glorious" pronouncement served as a starting gun that set off a wild gold rush.

In today's China some religions, including Christianity, are making a modest comeback. Confucius has even been restored to a place of dignity. But the cult of wealth has no real competition among the masses.

Aware that stringent new laws and high-profile executions may not be enough to counteract the runaway corruption and greed bred by this new religion, the Chinese government has also resorted to moral suasion.

Thus President Hu Jintao announced last year his "Eight Honors and Eight Shames," a list of dos and don'ts intended to serve as a moral guide to all citizens. The list speaks volumes about what Hu perceives to be lacking in the moral literacy of his people:

1. Love your country, don't harm it

2. Serve, don't disserve the people

3. Honor science, don't be ignorant

4. Work hard, don't be lazy

5. Unite and help one another, don't take advantage of others

6. Be honest, not profit-mongering

7. Be law-abiding, not chaotic and lawless

8. Live plainly and strive hard, don't wallow in luxuries.

Hu's list has been promoted endlessly by the state-controlled media, and news stories cite examples of citizens who have exemplified the president's exhortations in their daily lives.

But the great mass of people look on the list as yet another propaganda campaign by a government that long ago lost its moral authority. After all, the average citizen encounters in his or her daily life plenty of ignorant, lazy, lawless, profit-mongering government and Communist party officials who wallow in luxuries.

Hu was particularly concerned about China's young people, who have not experienced the deprivations endured by older generations of revolutionaries who built modern China. But his list generated immediate cynicism among the young. They quickly came up with a clever play on words (including the president's surname), using a derogatory Chinese phrase that calls out someone who pretends to speak wisdom but in fact speaks nonsense (Hu shuo bah dao) to ridicule Hu and his list.

The U.S. experienced its own brand of unfettered capitalism in the early part of the 20th century. It took decades before life-endangering business practices intended to maximize profit at any cost became anathema in our culture.

While Enron is a painful reminder that Americans are not immune from mega-fraud and greed, even our postmodern U.S. culture retains enough moral consensus to brand the manipulation and fraud of Enron executives and traders as not just legally wrong, but immoral.

That kind of moral consensus is missing in Chinese society today. Half a century of Marxist materialism has produced in China a form of existentialism best described in terms used at various chaotic times in human history: "Every man did what was right in his own eyes."

Will the combination of severe legal penalties and Hu's sermonizing turn the tide on corruption and fraud in China? Not likely in our lifetime.

Picture China as an enormous supertanker crossing the ocean, full speed ahead. How long will it take to turn such a ship around, when the captain and crew have no intention of slowing down the vessel?

For the foreseeable future, when you see a "Made in China" label in the store, think caveat emptor -- let the buyer beware.
Chi-Dooh Li is a Seattle attorney. E-mail: cli@elmlaw.com.
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