The Return of Melamine, and Chinese Product Safety Woes

Melamine, a chemical additive used to make plastics and fertilizer, has been confirmed to contaminate milk powder (produced by China's Sanlu Group), which is widely used in baby formula consumed both in China and New Zealand. Today, the contaminated milk product is confirmed to have been included in products reaching as far as Yemen, Bangladesh, and Burma. An announcement by China's Ministry of Health on Monday revealed on Monday that thus far, the contamination has cost the lives of 2 babies, and has caused illness in 1,253.

We know the face of melamine from last year's pet food scandal, which was also linked to Chinese processing/manufacturing. There have not been many breaks for China's food/product safety report card, as it has since suffered an equally jarring recall of toothpaste and tires,  and toy products – due to safety disputes, resulting from lead contamination. It seems that this ill-managed and unfortunate string of events are beginning to present themselves as symptoms of a bigger problem: that of nation whose wealth is so dramatically and disproportionately dispersed that rural communities continue to comprise small houses crowded with 3-generation families, and metropolitan cities, which  continue to open boutiques importing retail fashion with more than 100% mark-up on many of their products.

To quote Steve Dickinson, a law firm partner/Chinese food safety system expert: “These companies aren't really permitted to price their products at a commercially reasonable price. . . Yet their superiors are beating on them to make money. Melamine allows them to get higher-rated protein content at no extra cost.” He makes a good argument that despite efforts of the Chinese government to improve food safety, the urgency of this effort has yet to be filtered down to local levels.

On Monday, Chinese police and authorities arrested two brothers, who own a milk processing center in Hebei Province, on the allegation that the center purposefully added melamine to diluted milk. This practice enabled the center to test at a higher concentrations of protein, in order to meet requirements for a saleable product (There requirements were likely enacted as a result of a counterfeit formula scandal four years ago, where 13 Chinese babies feeding off the formula died of malnutrition).

To clarify – none of this milk powder has been used in products shipped to either Europe or the US, despite New Zealand's Fonterra's (a dairy farmer owners’ cooperative) 43% ownership of the Sanlu Group. Fonterra reportedly urged Sanlu to issue the recall as early as August 2, whereby unresponsiveness warranted governmental interaction between NZ and PRC.

The issue is China's reluctance to address circumstances like these, where an impending PR disaster is best mediated by a good damage control plan instead of taking slow measures to calculate the best possible announcement. In biding its time to respond to such pressing issues, China is doing itself a great disservice as the nation is already pressed to do its best to keep its head above water that is rocked by consumer nations. It is hard to tell whether Chinese officials are prepared to call the bluff of complaining trade partners who rely on Chinese investment, or whether the country is genuinely having a difficult time of prioritizing the placement of its time and attention. To say that China is egregiously embarrassed by this latest debacle and paying for its missteps in credibility, is a fair statement though, particularly given China's learn-and-reform flavor, and tireless efforts to move on and up.