Archive for the ‘Made In China’ Category

China’s new reality: Economic boom is slowing

November 10, 2008

Job cuts, factory closures, unpaid export shipments — stalling worldwide demand for products made-in-China is driving home a new economic reality for businesses that until recently were struggling to keep up with soaring exports.


China’s economy is still growing at an enviable rate: It expanded 9 percent in the quarter through September. But that was the slowest in 5 years and down from 11.9 percent last year. Forecasts for next year range as low as 7.5 percent.

The Golden Years have shuddered to a dramatic halt and much tougher times are upon us,” Stephen Green, economist at Standard Chartered Bank in Shanghai says, pointing to slowing exports and investment.

In this Feb. 16, 2008 file photo provided by China's Xinhua ...
In this Feb. 16, 2008 file photo provided by China’s Xinhua News Agency, workers prepare for construction of a new project Shanghai Center at the building site in Pudong District of Shanghai, east China. China’s economy is still growing at an enviable rate: It expanded 9 percent in the quarter ending Sept. 30, 2008. But that was the slowest in 5 years and down from 11.9 percent last year. Forecasts for next year range as low as 7.5 percent.(AP Photo/Xinhua, Niu Yixin, File)

The suddenness and severity of the chill from the global slowdown prompted leaders to announce late Sunday a $586 billion economic stimulus package aimed at boosting growth in China‘s own markets.

“This broad-based fiscal stimulus program will emerge as the government’s front line of defense against an excessive economic slowdown,” Jing Ulrich, J.P. Morgan & Co.’s chairwoman for China, said in a note to clients.

But it’s unclear whether the package will be enough to salvage exporters left high and dry by overseas customers who are either canceling or abandoning orders as they face what might be one of the bleakest Christmas shopping seasons in decades.

For apparel maker Yiwu Bangjie, the first sign of trouble came with the failure of a longtime American customer to pick up and pay for its latest shipment of seamless underwear, says Tao Jianwei, the company’s general manager.

“After the shipment arrived at the U.S. port, when we notified our customer to take delivery and finish paying, their reply was that they had no money to pay for the goods,” said Tao, whose company is based in eastern China’s Zhejiang province.

Yiwu Bangjie is one of the luckier casualties of the slowdown. Tao, who would not identify his U.S. customer, said he expects to get 90 percent of the $100,000 due back through export credit insurance.

“We’re lucky to have that insurance,” he said. “Everyone knows the global economy is headed for recession, so it’s best to be cautious.”

Others have suffered far more.

Thousands of factories have closed, especially those in labor-intensive industries such as toys and shoes. Official statistics on bankruptcies and factory closures are sketchy. However, the economic planning agency reports that 67,000 small- and medium-sized companies closed down in the first half of the year.

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Poisoned Milk Scandal Sours China’s Soft Power

October 9, 2008

By Willy Lam

China’s formidable state machinery was able to stage the largest Olympics in history and to have a “Taikonaut” perform a 20-minute spacewalk last week. Yet the world-scale scandal emanating from contaminated milk products has exposed the worsening malaise in the country’s political and administrative structure.

As of early October, four children died and more than 60,000 children were sickened after having consumed milk powder tainted with melamine, an illegal chemical used by farmers to fake the protein content of their milk. Not only rich countries such as the United States and Britain, but also Asian and African nations ranging from Singapore and Vietnam to Gabon and Ghana, have banned Chinese made dairy goods and a wide range of biscuits and candies made with Chinese ingredients.

A dairy farmer leads her cow to a milking station in Shelawusu ...
A dairy farmer leads her cow to a milking station in Shelawusu village in Inner Mongolia region of China on October 7. China published Thursday a new number of children hospitalised after drinking tainted milk, more than tripling the official figure to nearly 47,000.(AFP/Peter Parks)

More than a dozen big-name manufacturers within China’s $20 billion dairy industry – as well as the country’s food safety regulatory system – have been found guilty of either conniving in the use of the chemical or failing to spot the malpractice, according to reports.

The milk powder scandal has dealt a severe blow to the “made in China” brand even as the growth of China’s exports – the most important driver of the Chinese economy – has been slowed by economic downturn in its major markets.

More significantly, China’s export of tainted milk products – which has come on the heels of contaminated cosmetics and pet food as well as dangerous toys and furniture – has severely damaged the goodwill and “soft power” that the Chinese Communist Party (CCP) has tried to gain through multi-billion dollar “prestige-engineering projects” such as the 2008 Beijing Olympics and the 2010 Shanghai World Expo.

In an emotional meeting with the parents of children who had fallen sick after imbibing tainted milk, Premier Wen Jiabao said he felt “very guilty” about the poisoned milk, adding “I sincerely apologize to all of you.”

While appearing at the United Nations General Assembly as well as the World Economic Forum (WEF), Wen assured the international community of Beijing’s ability to fix the problem. Referring to the milk disaster, Wen said at the WEF last weekend: “This issue is not over yet, but please be assured that we will soon unveil plans to boost the food industry. My government and I will lead our people through this hard journey.”

While Wen has a well-deserved reputation as a “premier who puts people first”, his words may not sound that convincing. Only weeks after the Beijing Olympics, China has witnessed man-made disasters of gargantuan proportions.

More than 250 residents in Xiangfen County, Shanxi province, perished in a mudslide in early September. The accident was triggered by the collapse of the retaining wall of an illegal mining dump containing tons of liquid iron ore waste. In nearby Henan province, 37 miners were killed in an accident in Dengfeng County. The cause of the disaster was again lax regulations and poor inspection. Then came the fire in Wu Wang Nightclub, an illegal, unlicensed outfit in Shenzhen, the boomtown just across the border from Hong Kong. Forty-three revelers, including five day-trippers from Hong Kong, perished.

Farmers pour fresh milk onto the ground at a milk collection ... 
Farmers pour fresh milk onto the ground at a milk collection station in Wuhan. Farmers in this large milk-producing region of north China said governmental safety measures taken in the wake of a tainted milk scandal that shocked the world had been rigorous, but apparent flaws remained.(AFP/File)

Even assuming that party and government authorities are really serious this time, they face an uphill battle in eradicating unscrupulous and malfeasant manufacturers and businessmen in China. A key reason behind the recent spate of scandals is that particularly in the provinces and cities, entrepreneurs and regional officials enjoy cozy relationships. And this is not solely because large corporations are major tax contributors.

Sanlu Dairy Co, the epicenter of the milk scandal, contributed 330 million yuan (US$48.5 million) of taxes to the municipal government of Shijiazhuang, Hebei province, last year. Many companies invite local officials to become “silent partners” in their corporations – in return for “protection” rendered by the powers-that-be.

Former Sanlu chairman Tian Wenhua, for example, is said to be on “comradely terms” with Shijiazhuang officials. It is perhaps for this reason that Tian was given the honorary position of deputy to the provincial people’s congress. Similarly, the Wu Wang Nightclub in Shenzhen has been operating without a license for more than a year. This could only have been possible due to what Chinese call a “protective umbrella” proffered by well-placed officials in the city.

Despite the “serve the people” credo of the Hu-Wen administration, supervision over food and industrial safety remains lax and ridden with loopholes. Last year, the former director of the State Food and Drug Administration, Zheng Xiaoyu, was executed for taking bribes from pharmaceutical firms whose shady products were responsible for the deaths of at least 10 consumers.
A Chinese baby drinks coconut milk mixed with water instead ... 
A Chinese baby drinks coconut milk mixed with water instead of baby formula in Shanghai. China insisted it is being open about the impact of milk tainted with the toxic chemical melamine, but declined to make public the latest data on how many children had fallen ill.(AFP/Mark Ralston)

The issue of fake or tainted milk powder is not new. In 2004, at least 12 infants died after taking in baby formula with no nutritional value. The General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ), which is responsible for checking milk and related merchandise, has been aware of the illegal use of melamine for a long time. Just last year, Chinese-made pet food was banned in the United States because it contained high dosages of melamine.

Inexplicably, the GAQSIQ has in the past couple of years awarded dairy giants Sanlu, Meng Niu, and Yili – whose products were found to be tainted with the chemical – the coveted “famous brand” designation. This status meant their products were exempted from routine inspection by quality-control watchdogs.

The muddleheaded nature of the Chinese bureaucracy is also evident from rescue operations mounted by the State Council (or cabinet) in the wake of major disasters. The modus operandi of choice is setting up a multi-departmental “emergency leading group” to find out the causes of the mishaps and to recommend remedial measures. Thus, soon after the milk powder fiasco broke in early September, Beijing established a leading group consisting of cadre from seven state units – the Health Ministry, the GAQSIQ, State Administration of Industry and Commerce, Ministry of Agriculture, Ministry of Public Security, the State Food and Drug Administration, and the provincial government of Hebei.

This so-called inter-departmental approach to problem-solving has also been used by the Wen cabinet to tackle illegal land-zoning practices, real-estate speculation and other malpractices in the regions. For example, the State Council in early September sent a work group consisting of cadre from several ministries to check on illegal education charges levied by different provinces. These units included the National Development and Reform Commission, the Education Ministry, the Ministry of Supervision, the Ministry of Finance, the National Audit Administration and the National Press and Publication Administration.

The simultaneous involvement of several departments reflects the fact that the line of responsibility is not clear; no one single ministry seems to be in charge of matters ranging from food safety and education to housing and land use.

Quite a number of observers believe that the root of bureaucratic malaise lies in an outdated, non-transparent political structure.

Hu Xingdou, a reformist professor at the Beijing Institute of Technology, thinks that Beijing must take bold steps to overhaul governance. “Every time there is an incident, the relevant department takes medicine to cure the headache. That only fixes the problem, not the system,” he indicated. “Now is the time to transform the way of thinking, to repair the system.”

The basic structural shortcoming is excessive concentration of power in the party. Thanks to the CCP’s near-monopoly of most political and economic resources, there are no meaningful checks and balances within the system. Institutions that could provide some oversight over party and government authorities – for example, the legislature, the courts or the media – are tightly controlled by CCP apparatchiks.

Compounding this endemic malaise is the long-standing tradition – subscribed to by leaders from Chairman Mao to President Hu – of regarding “upright rulers” as more important than good systems. For generations, the CCP has been trying to nurture “virtuous and competent” cadre for leadership posts rather than designing systems with built-in checks and balances.

The imperative about propagating saintly fumuguan (“parents-like officials”) harks back to the Confucian ideal of a benevolent mandarin. Mao wanted all cadres to emulate the legendary Lei Feng, the incorruptible, ultra-altruistic model proletariat. Speaking on the recent spate of horrendous industrial and food-safety incidents, Hu said late last month in the People’s Daily that this was due to the fact that “some cadres lack a consciousness about their [proper] goals, knowledge about the overall political requirements, a [proper] estimation of future dangers, and a sense of responsibility.” The party chief urged senior officials nationwide to “resolutely uphold [the ideal] that the CCP is based on public service, that administration is for the sake of the people … and that cadres must always bear in mind the safety and well-being of the masses”.

An important achievement in personnel reform under the Hu-Wen leadership is the concept of “cadre responsibility”, whereby senior officials have to take political responsibility for serious “mass incidents”. Thus, a number of cadre either resigned or were fired in the wake of the milk powder scandal. They included the GAQSIQ director Li Changjiang and the Party Secretary and the Mayor of Shijiazhuang, respectively Wu Xianguo and Ji Chuntang. In mid-September, Shanxi Governor Meng Xuenong and Vice-Governor Zhang Jianmin were sacked due to the mudslide incident. In Henan, the Party Secretary of Dengfeng County, Zhang Xuejun, received a severe reprimand while Mayor Wu Fumin was forced to step down.

However, the fate of these disgraced cadre has raised a number of questions about whether the CCP leadership has followed fair and judicious principles in meting out punishment. If the governor of Shanxi was sacked for the sorry state of his provinces’ mines, why has Hebei Governor Hu Chunhua escaped censure for the milk powder scandal?

There is also the question of whether the party chief – or the governor or major – of a province or city should shoulder responsibility for lapses. The fall of both the party chiefs and mayors of Shijiazhuang and Dengfeng seems to indicate that senior members of both the party and government should take the rap. However, in the case of Shanxi, only the governor and the vice-governor – but not the more senior-ranked party secretary of the province, Zhang Baoshun – took the fall.

One explanation is that Hubei’s Hu, 45, and Shanxi’s Zhang, 58, have been spared because of their closeness to President Hu. In particular, Hu Chunhua, who, like the president, is a former head of the Communist Youth League, is regarded as a possible “core” of China’s sixth-generation leadership. The Hu-Wen leadership’s apparent failure to come up with a laudable cadre responsibility regime is one more illustration of deep-seated woes in the political structure.

Willy Wo-Lap Lam is a Senior Fellow at The Jamestown Foundation. He is the author of five books on China, including the recently published Chinese Politics in the Hu Jintao Era: New Leaders, New Challenges.

Calif Suing Toy Companies Caught Using Lead

November 19, 2007

SAN FRANCISCO (AP) – California’s attorney general has field suit against 20 companies, claiming they sold toys containing “unlawful quantities of lead.”

The suit alleges that the companies — including Mattel and Toys “R” Us — knowingly exposed children to lead and failed to provide warning of the risk.

If the suit is successful, the complaint says the companies could pay a $2,500 fine for each violation.

The move follows major recalls of toys, lunch boxes, children’s jewelry and other goods during the last year by the U.S. Consumer Product Safety Commission in Washington.

The suit also names Wal-Mart, Target, Sears, KB Toys, Costco Wholesale and others as defendants.

A Mattel spokeswoman says the company had been expecting the action, and that it has already implemented a system of checks to make sure its quality and safety standards aren’t violated again.

The toys were made in China but the suit will apparently aledge that the toy companies and toy sellers were aware or should have been aware of Chinese business practices that did not measure up to U.S. standards.

Feds urge vigilance on toy safety

US lawmakers seek stiffer regulation of made-in-China toys; more recalls announced

November 1, 2007

by P. Parameswaran

WASHINGTON (AFP) – US legislators unveiled plans Tuesday for stiffer laws to regulate made-in-China toys after Halloween “treat” buckets and costume teeth became the latest tainted products from the Asian nation to be taken off American store shelves.

The Democratic-controlled Congress expects to introduce a wide-ranging toy and child product safety legislation in the “next few days,” said Bobby Rush, the head
of a House of Representatives panel on commerce, trade and consumer protection.

“We are in intense negotiations as we speak” to forge the Comprehensive Consumer Product Safety Bill, he told a news conference at Capitol Hill, where tainted China-made toys recalled in the run up to Halloween were prominently displayed.

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More China-Made Toys Recalled

WASHINGTON, Oct. 31 (UPI) — The U.S. Consumer Product Safety Commission announced the recall of Chinese-made Elite Operations Toys sold by Toys “R” Us because of high levels of lead.

About 16,000 sets of the toys were sold by Toys “R” Us or nationwide. Toys “R” Us initiated the recall when it learned the paint on the toys contained excessive levels of lead, in violation of the federal lead paint standard.

Four recalled military-style Elite Operations toys — manufactured by the Toy World Group Ltd.’s Chun Tat Toys Factory in Guangdong, China — were Super Rigs (product #1004), Command Patrol Center (#1020), Barracuda Helicopter (#1023), and 3 Pack, 8-inch Figures (#1024). The product number is located on the toy’s packaging.

Get more information:

United States firms recall over 90,000 Taiwan, Vietnam-made toys

October 13, 2007

Saturday, October 13, 2007
By Natasha T. Metzler, AP

WASHINGTON — More than 90,000 children’s products, most imported by J.C. Penney Co. Inc., are being recalled for containing dangerous levels of lead, a government safety group announced.

J.C. Penney recalled Chinese-made Winnie the Pooh play sets and decorative ornaments with a horse theme, as well as art kits made in Taiwan and Vietnam. Totaling 70,400, the toys imported and sold by J.C. Penney all had excessive levels of lead in their surface paint.

Lead is toxic if ingested by young children. Under current regulations, children’s products found to have more than 0.06 percent lead accessible to users are subject to recall.

Consumer Product Safety Commission spokeswoman Julie Vallese said this round of toy recalls is “the direct result of the commitment that was made earlier this summer of cleaning the proverbial house.”

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China’s influence spreads around world

September 2, 2007

By WILLIAM FOREMANSeptember 2, 2007

KARRATHA, Australia (AP) – For nearly three decades, Chinese peasants have left their villages for crowded dormitories and sweaty assembly lines, churning out goods for world markets. Now, China is turning the tables.

Here in the Australian Outback, Shane Padley toils in the scorching heat, 2,000 miles from his home, to build an extension to a liquefied natural gas plant that feeds China’s ravenous hunger for energy.

At night, the 34-year-old carpenter sleeps in a tin dwelling known as a “donga,” the size of a shipping container and divided into four rooms, each barely big enough for a bed. There are few other places for Padley to live in this boomtown.

Duct-taped to the wall is a snapshot of the blonde girlfriend he left behind and worries he may lose. But, he says, “I can make nearly double what I’d be making back home in the Sydney area.”

The reason: China.

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China probes its role in Panama deaths

July 23, 2007

By AUDRA ANG, Associated Press Writer

BEIJING – China is investigating a state-owned trading company’s role in tainted medicine that killed at least 94 people in Panama, an official said Monday, as the European Union urged Beijing to be more vigilant about product safety.

Beijing battled international mistrust about Chinese exports…

Read it all at:

See also:
China Linked to Panama Cough Syrup Poisoning Deaths

Imported Seafood, Chinese Products and the Twilight Zone

July 22, 2007

By John E. Carey
Peace and Freedom
July 23, 2007

Imported Seafood

After hearing all the stories of tainted seafood from China, much of which has now been banned from U.S. import by the U.S. Food and Drug Administration, my mother-in-law heard from her daughter (my wife) that I had done extensive research into catfish imported into the U.S. from Vietnam.

We found that the Vietnamese farm (pond) grown catfish were fed human feces most of their lives. The “bottom feeders” seemed to love the stuff and thrive on it.

Just a few months before “harvesting,” the Vietnamese catfish get treated to the cleanest water Vietnam can provide and a high protein diet that would make a professional boxer smile. This “washes” the Viet catfish just before they are sold for export.

Everybody seemed happy until the FDA (and some in the American public) decided the practice of feeding human feces to catfish was disgusting. Maybe even dangerous.

Vietnam says the problem has now been corrected and that catfish sales are, well, off the bottom.

Yet my mother-in-law decided she would no longer buy any frozen imported seafood from “Communist Asian nations” (China and Vietnam). Then she decided unilaterally to include Thai seafood in the deal. Why?  Every Vietnamese seems to know that when an export product is questionable, Thailand will be more than happy to label the product as Thai for a small cut in the action.  Plus Thailand had a coup last year and they are no longer a democratically governed nation. So Mom figures they are one step closer to communism.

We’ve moved from chemistry to politics in one giant leap of the, well, catfish.

So, mother-in-law now only eats fresh seafood from the U.S.A.

There are two twists to this. My wife’s mother is Vietnamese herself. And guess who gets to drive mother to the Washington D.C. waterfront for U.S.A. seafood? Me.

Fortunately, we found some wonderful Vietnamese-American seamen to assist us with American crab, flounder and other goodies!

Mother is on the All American Seafood Diet from now on: for chemical and political reasons, apparently!

Chinese Products

For several years we’ve watched the rising tide of imported Chinese consumer products into the United States. One of the real bell ringers for me has been a friend who says, every time we meet: “Why don’t we just all buy American.”

If you’ve been to any Sears, WalMart or Target lately you already know the answer: everything is made cheaper in China so U.S. businesses, to a great extent, no longer make toasters and the other things you need at home.

This morning, at church, we found offered for sale, some small holy statues meant for car dashboard mounting. Some think this kind of thing can protect you in case of an accident. Every dashboard mounted holy statue I have ever seen is looking INTO the car. I decided, for the first time in my life, to give this car holy statue magic a try. But because Washington D.C. traffic is getting more and more dangerous, I decided I’d mount my holy person looking OUT though the windshield. I figure she’ll scream or something if any real danger is about to surprise me.

In determining how to mount my holy person on the dashboard, I turned the tiny statue upside down seeking instructions. A small label on the bottom reads, “Made in China.”

Unexplained Apparition

There was a TV program named “The Twilight Zone” when I was a kid. In it, Rod Serling explored the unexplainable week after week.

Last week, when I got to the bottom of three or four deck underground garage, I had to stop for a blind lady with a white cane smack in the driving lane, walking somewhere. I could see no other cars anywhere and have no idea what a blind lady was doing at the bottom of the underground garage.

My wife said: “She has a holy statue WAY better than yours.”

Tricky Vietnamese Truth About Catfish

Despite outcry, many Americans can’t live without China goods

Despite outcry, many Americans can’t live without China goods

July 22, 2007

by Rob Lever

WASHINGTON (AFP) – Even as protests grow about US imports from China, many Americans may find it hard to manage without the range of products that dominate or in some cases monopolize the marketplace.

Safety concerns over Chinese-made goods prompted further comments in Congress over the past week and led President George W. Bush to establish a new panel to review the safety of imported goods.

Yet economists and consumers say that Chinese-made products have become so ubiquitous ….

Read the rest:

Chinese dissident was tortured

Frightening Scenes: Beijing’s Brutal Dirty Laundry

China Planning a Surreal Facade for Summer Olympic Games: Beijing 2008
(Details China’s product safety and other scandals this year)

China closes 3 plants on safety concerns

July 21, 2007

SHANGHAI: Chinese regulators said Friday that they had revoked the licenses of three companies that had exported mislabeled drug ingredients and tainted pet food ingredients to the United States and other parts of the world.

By David Barboza
The International Herald Tribune
July 20, 2007

The action comes as Beijing has gone on the offensive, trying to show that regulators here are moving swiftly to help ease global worries about the quality and safety of Chinese exports after months of worrisome product recalls and reports about defective or tainted Chinese goods.

China closed the Taixing Glycerin Factory…

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