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Dangerous Milk Formula Sold in New York

According to a report from The Epoch Times, dangerous baby milk formula that caused babies heads to swell due to malnutrition was found in a local Chinatown supermarket in New York City. The Agriculture Department of New York City put an immediate ban on powdered milk imports from Xinjiang province, China, and is investigating whether all sales of powdered milk products should be restricted in the United States.

New York agriculture officials found that seven brands of powdered milk produced by Xinjiang Ili dairy company lacked the necessary requirements of protein, milk fat, calcium and magnesium set forth by the U.S. Food and Drug Administration. The Chinese government food inspection agency also considers the powdered milk products by Xinjiang Ili to be inadequate. The supermarket manager where the milk was found said that the products were purchased recently from a U.S. distributor and were not imported directly from China.

The New York Agriculture Department ordered all supermarkets in Chinatown to stop selling powdered milk products imported from China and is investigating the distribution company selling Xinjiang products. All powdered milk products have been removed from all supermarkets in Chinatown.

People were in an uproar last April when inferior powdered milk found in Fayang and Anhui provinces caused babies’ heads to swell while the growth of their lower body was stunted. More than 189 babies suffered from malnutrition that left at least 12 dead. Another incident in Guizhou province caused 150 children to become seriously ill from drinking staphylococcus-laced powdered milk.

Many blame the government’s lack of immediate action for the rash of contaminated food products on the market in China. Even after a product was found to cause serious illness and even death officials were reluctant to take action.


Milking China for Product Quality Control

“Warning – Follow instructions exactly. Prepare bottles and teats as directed. Do not change proportions of powder except on medical advice. Incorrect preparation can make your baby very ill……”

The above is typically found on labels of any brand of baby milk formula on most supermarket shelves in the West. However, following the instructions exactly wouldn’t have made much difference to little Yang Kaili, who may suffer permanent brain damage after being fed fake formula milk made in her homeland – China.

The news of the fatal formula milk, produced in over 140 factories across China, shocked the world. The LA Times reported in May 2004 that 13 babies died and more than 170 suffered serious malnutrition as a result of drinking the fake baby formula powder.

Many mothers in rural China turn to baby formula because they cannot produce enough of their own milk. The cheapest baby formula on the market, “Star of the Grasslands”, has been supplied for the past two years. The price made it very popular with many mothers, including Kaili’s mother. One month after Kaili started drinking the baby formula, her little head started to swell, her skin turned bright red and her eyes were reduced to slits. A similar agonizing fate has been suffered by hundreds of babies across China who drank the same baby formula.

In America many may not even think twice when buying baby formula for their babies. However, the Epoch Times recently reported that the fatal baby formulas made in China are also available on the streets of New York. Agriculture officials found that seven brands of powdered milk produced by Xinjiang Ili dairy company lacked the necessary requirements of protein, milk fat, calcium and magnesium set by the U.S. Food and Drug Administration.

This substandard milk formula is yet another example of the lack of quality control inside China’s factories and forced-labor camps. Numerous cases have also been reported in Epoch Times regarding other harmful products that are available to the consumers. For instance vegetables pickled in poisonous industrial salt and chemicals, and poisonous colorings added to noodles. According to the Asian Labor News database, a popular new type of rice grain called ‘laborer grain’ (min-gong liang) was found to contain carcinogens (an ingredient that could cause cancer). These incidents will no doubt make consumers think twice before buying ‘Made in China’ products.

An increasing number of major enterprises are shifting their production to Asia, attracted by the cheap labor. However one company’s cost cutting, could lead to thousand of people being poisoned. Is it worth it? Imagine buying a pair of Puma shoes that were sewn and glued by workers forced to work up to 16.5 hours a day, from 7:30 in the morning to midnight, six or seven days a week, for wages of just 31 cents an hour. According to The National Labor Committee, Puma is making a net profit of $12.24 per hour on each of their employee in China. Annually, Puma is reaping a profit of $38,189 on each worker. In a single factory, Puma’s profit from the workers can reach over $92 million a year.
With jobs and production lines shifting to Mainland China, what are the real costs and benefits at the end of the day? As China continues to report rapid economic growth, thousands of Americans are sinking into unemployment. On July 2, 2003, the American Textile Manufacturers Institute (ATMI) published a shocking report stating that more than 1,300 textile plants in the U.S. would have to close by early 2004, resulting in the loss of over 630,000 jobs. The U.S. textile and apparel clothing market will be entirely dependent to China if protective measures were not implemented in a timely manner.

Evidence suggests that consumers and manufacturers are finding it difficult to ignore the human cost and as well as workers’ rights when considering trade with China. In 2001, Swiss confectionary giant Nestle ordered 100,000 toy rabbits from the Beijing-based Mickey Toy Corporation. The toys were produced under inhumane conditions. Hundreds of women, many of whom were illegally detained Falun Gong practitioners, were forced to work up to 20 hours a day. Some were beaten or tortured if the quota was not fulfilled. What lies beneath the story is behind the production of each rabbit which lies incredible pain and suffering.

In recent years, the hair product industry has experienced a marked growth. Various hair accessories have flooded into U.S. and the world’s biggest manufacturer, Henan Rebecca Hair Products Inc, occupies one fourth of the U.S. market (June 22, 2003, issue of March into the International Big Circulation). Few people realize that Henan Rebecca Hair Products Inc, a multi-million dollar corporation, thrives because of slave labour.

It is naive to suggest that business is not about profits, but who said that profit and humanitarian concerns have to be mutually exclusive? Apart from the benefits of outsourcing and the increased profit margins, where do human lives fit in? Perhaps replacing “Made in China” tags with “Made in a Chinese Labor Camp” is one option? Inadequate transparency of information is not going away on the Mainland. These Asian partners will continue to do more than raise an eyebrow for the concerned consumer and prompt suppliers will have to re-consider the ethics of their business decisions.

The alarming lack of product quality control, the violation of workers’ rights in China is a grim reality hanging in the favorite business destination of the corporate world. One thing is for sure, the consumer can only hope that tragedies like the baby formula will not be exported to other countries or harm any infant wherever they are.

Alexandria Brysk is a correspondent for Chinascope.

Filling in the GAP

Adam Smith’s idea to “never to attempt to make a home what it will cost him more to make than to buy,” is a perfect description of the philosophy behind Chinese product manufacture. It is this cheapest form of produce that allows us to keep up with today’s throw away fashion ideology. Yet when asked, most U.S. consumers today will say they prefer to buy American brands and U.S. made products. However, with the influx of foreign goods — U.S. imports totaled $1.2 trillion in 2002, 11% of U.S. GDP — buying American is no longer practical in some instances and impossible in many others. Price often takes precedence over other priorities such as quality, durability and style. So while “Made in America” may no longer be as important as we once believed; are we really getting our money’s worth? What is the real cost of using cheaper clothing manufacturers to create a sustainable business future for America?

In recent times, China has become the world’s biggest textile and clothing exporter, selling $42 billion of clothing and textile manufactured products overseas in the first half of 2004. This has led to a crossroads situation in countries like America, where the National Council of Textile Organizations is predicting that 650,000 U.S. jobs will be lost by 2007 as 1,300 textile factories close due to the ability of retail outlets and fashion houses to outsource their products to countries like China.

Yet it appears that cheaper is not necessarily better for the producers who are choosing to manufacture in China. Certainly, the idea of going to China must have been causing a few headaches for some managers from America’s second largest clothing retailer Gap Inc. Recently The Gap Inc. (trademarks include Gap, Banana Republic, Gap Kids, Gap Shoe Stores, Baby Gap Store) has found out the hard way that China was not a suitable environment for its business. In a nutshell the Gap has cancelled contracts with 42 of its clothing manufacturers in China for breaching Gap’s labor standards this year. The Gap announced the changes in its Social Responsibility Report (SR Report), which described the company’s internal investigations into the labor practices of its factories worldwide in 2003. The report detailed that 9% of China’s 464 factories producing merchandise for Gap were dropped. This placed China at the top of the list for compliance violations in the case of Gap’s factories, when compared to other nations. China is one of the 50 countries that Gap outsources its labor to, but also the source for the largest production. In 2003, 16% of Gap’s merchandise came from China, but according to the SR Report there were “unique and complex compliance challenges” involved. One example of these challenges includes the difficulty of addressing workers’ needs and grievances “in a country that does not recognize workers’ right to associate freely outside of government approved organizations.” The report said the reason such a high number of factories were dropped as Gap’s suppliers is due to the “concealment of overtime and unwillingness to share complete and accurate information.” Over 50% of the factories failed to fully comply with local laws. 25 to 50% had poor records of the age of their workers, unclear wage statements and poor working environments, such as a lack of first-aid kits, personal protective equipment, operational safety devices on machines, and proper means of storage for flammable and hazardous materials. Investigators found physical coercion and verbal abuse violations occurred in as many as 25% of the factories. Also, common were violations of local legal working conditions and restricted access to Gap internal inspectors.
Since the release of the Report, human rights groups such as Sweat-shop Watch have praised Gap for its openness and movement towards better working conditions in its factories. Such positive feedback for Gap’s actions have quelled old accusations of labor abuses as well as placing pressure on other clothing and manufacturing companies with factories abroad to follow suit. Global corporations like Wal-mart might follow the trend, after observing the precedent set by Gap. Knowledge is an empowering tool for both the consumer and the producer as it allows us to create sustainable economic opportunities for ourselves and others in this global community. So what have we learned from America’s clothing giant built on the two of the most popular fashion items, of jeans and T-shirts? It shows that multinationals such as Gap Inc., can set social and business trends, that can reach beyond the borders of countries. After all, they are already setting global trends with their jeans.

M. Ho, and Victoria Kelly-Clarke are correspondents for Chinascope.

What Lies Beneath: Beijing 2008 Olympic Games

The highest aim of the Olympic Games is set out in the Olympic Charter: “encouraging the establishment of a peaceful society concerned with the preservation of human dignity.” Yet of all the nations in the world which could have hosted the next Olympic Games, the International Olympic Committee (IOC) has picked China the country generally viewed as the biggest violator of human dignity.

From the issue of Tibet, to the persecution of Falun Gong practitioners, Christians, Catholics, democracy activists and human rights advocates, China’s human rights record is appalling. Visitors to the 2008 Olympics will not need to go far to view this modern history of China. Attendees of the cycling, marathon and triathlon events will only need to look around their venue—Tiananmen Square.

Can the world forgive and forget?

Tiananmen Square, or the Gate of Heavenly Peace, was originally constructed for citizens to air their case before the Emperor without fear of reprisal. In more recent times, however, it has been the site of the worst bloodshed and repression that modern China has known. In the past 15 years many have seen the 1989 massacre of student democracy activists, and the arrest of thousands of Falun Gong practitioners.

While these simple paradoxes are enough to cause some people to reconsider their attendance at the 2008 Olympics, it appears a far more pressing issue is coming to the surface. Corruption has dogged the IOC and the host nations for the past few years. While corruption scandals in the past have generally focused on the IOC and its officials, many Chinese nationals are concerned that China’s centuries-old custom of corruption will affect the Beijing games. As 22-year-old student, Sun Rongrong, expressed to the BBC World News Service in 2001, “There is a widespread fear that billions of dollars in Olympic-related construction projects will end up filling the pockets of corrupt officials.” (The BBC World News Service, Saturday, 14 July, 2001, ‘Beijing Revels in Olympics Victory’.)

It certainly appears that this fear was well founded, as the Auditor General of China’s National Audit Office (CNAO), Li Jinhua, reported on January 31 that there were cases of embezzlement amounting to 16.5 billion yuan (~$2 billion) uncovered by government audits in 2003. Local CNAO offices conducted the audits, which were focused on revenue and expenditure statements of public organizations in 26 provinces, regions and cities.

The audits revealed a full spectrum of accounting misconduct. Minor infractions took many forms, such as not reporting income and expenses according to regulations. More serious infractions were also common, such as many departments giving out fines without justification, abusing expense accounts, and not banking department funds into correct treasury accounts. Investigators also revealed that more than 290 grassroots public organizations had secretly set up 1325 state treasuries, to which they which directed over $700 million yuan (~$90 million).
Bottom Line

The CNAO report also disclosed that government officials at various levels of the government had misused more than $2 billion in 2003, with the 2008 Olympic committee also fingered for embezzlement. CNAO found that the sporting body had used more than $15 million inappropriately by spending on private housing for staff, and by diverting funds into other investments. One can only imagine the amount of corruption surrounding the pool of $33 billion used to build the Olympic infrastructure in Beijing. However, this widespread fraud will mean that all sorts of bribes and crooked deals may have taken place, which brings up the issue of the safety of the construction projects. In the past, newly built infrastructure like highways, high rise buildings and public housing were found to be unsafe due to corrupt officials cutting costs on these projects. An example of this is seen in the above mentioned CNAO report which also revealed that during last year’s investigations on the use of funds for treating and preventing water pollution in the Three Gorges Dam, from the area around the city of Chongqing and the Hubei Province, it was discovered that the amount of contaminants entering the dam area was unclear, as part of the special teams established to prevent and treat water pollution were unable to reach the discharge standards. China seems to be sweeping all this under the rug, a nasty habit it has developed when dealing with people’s live. It begs the question of how large is the façade and is the West going to implement any real checks and balances on China’s Olympic preparations.

Bad taste in the mouth
So far, the picture being painted is that the world is haunted by a shadow of doubt about China’s human rights record, its endemic corruption and its ability to fulfill the role of Olympic host. Altogether, this creates a bad taste in the mouth, like the aftermath of accidentally drinking sour milk. If it looks bad, and smells bad, it probably is bad, so do you really have to taste it, in spite of everything?

Did you know these facts about China?

Electricity is scarce in Beijing especially during summer, resulting in frequent “brownouts” (planned blackouts) and blackouts.

Construction companies and government officials related to the Olympics are being investigated on corruption charges.

Traffic congestion is a major problem in Beijing, as motor vehicles become more affordable for the Chinese. This has resulted in high levels of pollution, infrastructural problems and traveling difficulties.

Government newspaper says for every120 men there are 100 women.
Xinhuanet reports about a plastic surgery epidemic in China, with children as young as 3 years old being given dimples by their parents.

Energy Bureau of the State Development and Reform Comission reports China’s output of primary energy was equal to 1.603 billion tons of standard coal last year, up 11% over the previous year.

According to the China Daily, China discharged 19.27 million tons of sulfur dioxide in 2002, 90% of which came from burning coal, and 200 million tons of ash and solid waste.

The average wage for worker in Guangzhou this year is 22, 446 yuan (~$2750) , 9.2% higher than 2003 according to Asian Labor News.

Priceless ancient artifacts and historical residential sites are being demolished to make ways for new residential and office buildings for the 2008 Olympics.

Victoria Kelly-Clarke is a correspondent for Chinascope.

Lost in Translation

‘No problem’ is a common phrase used by the Chinese. It does not, however, actually mean ‘we don’t have problems here’; it is normally used as a friendly expression by Chinese people to engage an English speaker. As business increases between the East and West, giving a good impression and ensuring a professional relationship may not always be easy. After all even if both parties are from the same culture, issues are almost inevitable, but where there are problems there can be solutions.

Following is a shortlist of some tips that offer some insight into some of the do’s and don’ts in contemporary China. There are different practices in different parts of Asia, some are more Westernized than others, for instance in Hong Kong and Singapore business meetings and contracts can be conducted in English. However this may not be the case for Mainland China, the doors are open for business to the West, but there could be some social and cultural practices that make it a challenging process. In other words, doing business in China may come as a reality check for many, where good business judgment and plans could be clouded by cultural or social differences. So rather than have awkward looks and silences, communication could be lost in translation. This commentary therefore offers some interesting and insightful points which offer a general guide to your next encounter with Chinese businesses.

√ This Time It’s Personal

Your friendship and relationship network is the key to everything in China. Try to become friends with everyone, and keep it personal. You may have the best deal and the most enticing offer, but in the end that’s just business. Your Chinese counterpart may well be asking ‘What’s in this for me, personally?’ They are far more likely to sign a contract with someone they know and trust, so getting to know them is even more important than discussing the details of your contract. A good bottle of scotch and a box of cigars have much the same implications as they do in the West, and may just speed things along.

√ Always Have Your Cards Handy

Business cards are important. Please ensure you acknowledge and compliment your Chinese counterparts’ business titles printed on their cards. Titles are everything in China — they might not always be explanatory but are significant.

√ Respect Authority

Of all the friends you make in China, the government officials are the most important. They will sign the authorizations and certificates. In other words, they are your local business guarantor who will make or break your deal.
√ Be Generous

Be aware of all favors done for you, and be prepared to respond in kind.

√ Look for the Signals

Don’t look surprised about the expectation of offering a bribe, as you may well encounter this sooner or later. If you don’t recall receiving any signals, this may explain why things are not running so smoothly at present.

√ Bring Your own Interpreter

It is always wise to have your own interpreter with whom you maintain a long-term relationship. They can interpret for you not just the literal meaning of words, but also the social implications, and spot signals you may have missed. However, you cannot always assume a third-party interpreter will be impartial and accurate.

√ Talk the Talk

Learn a few basic Chinese words and sentences. This is a great icebreaker — but make sure you get the vernacular right. Do your associates speak Cantonese, Mandarin, or a regional dialect such as Shanghaiese?

√ Any Other Name

Acquire a Chinese name for your business. Do however always check what it means. Chinese is phonetic so you need to make sure it doesn’t sound like something unflattering. The last thing you need is a name that makes you sound ridiculous; for example, the name Marcus translated incorrectly could sound like “horse manure.”

K. Song & Max Dobson are correspondents for Chinascope.

The Petition System in China

China’s petition system is not considered part of the judicial system, as one might expect. It is a special apparatus of the Chinese Communist Party and the government, and it has played an important role in modern Chinese history. One director of the Appeals Office at the Ministry of Public Security stated, "The petition system in China originated from people writing letters to our leaders, bringing up problems and suggestions. This dates back to the Yan An times, 1936 to 1948, when people wrote letters to Chairman Mao to make suggestions. In the beginning, the leaders reviewed and handled the letters personally. Later, as more people wrote suggestions, a secretariat office was set up to handle the letters."

In 1950, the Party Central Committee withdrew the Office of the Political Secretariat and established the Office of the Secretariat of the Central Party Administration for the sole purpose of processing petitions and meeting with those who came to file petitions. In November 1950, the Party Central Committee issued regulations requiring "Party Committees at district, provincial and regional levels to establish designated offices or personnel for processing petitions, and to set up systems for registration, research, transfer, inspection and filing." In June 1951, the State Council also issued regulations stating, "The People’s Government at the county level or above must delegate to certain offices to designate staff within the initial budget and billets who will be responsible for handling petitioners and letters from the people, and establish an information desk or reception room to receive people who come and visit." Under instructions from the Party Central Committee and State Council, many local governments set up organizations and designated staff to handle petitions and petitioners.

According to a document formulated by the Office of the Chinese Communist Central Committee and the Office of the State Council entitled "Regulations of Functionality, Internal Structure, and Personnel of the National Appeals Bureau (February 13, 2000)", the National Appeals Bureau reports to the Party Central Committee Administrative Office and to the State Council Administrative Office. The objective of the Bureau is to process letters and receive visitors to keep the appeals channel open for the masses. The routine work of the Bureau is to "report to the leaders in the Party Central Committee Administrative Office and the State Council Administrative Office any important suggestions, complaints, and problems reflected in the appeals letter and visits." The Bureau is also required to "study the information gathered in the appeals, conduct further investigation, and propose suggestions on specific policies and guiding principles."

Since 1950, there have been significant changes from state and party leaders reviewing petitions to where things stand today. The implications have also changed a great deal. The window of the appeals office has become the focal point of various social conflicts, as handling petitions is now a matter of social stability.

For example, the petition system played an unprecedented role after the conclusion of the Cultural Revolution. At the time, the Office of Appeals at the Ministry of Public Security had over 70 staff members. Everyday, three to four hundred people lined up, waiting for their cases to be overturned on the basis of wrong or false information leading to their arrest and conviction. From that point on, people started to view the appeals office as a place to overturn injustices. In fact, the Ministry of Public Security has indeed set forth four responsibilities for the appeals office: to internally monitor the Ministry, to receive messages from the public and pass them on to the leadership, to assist the public and help them resolve problems, and to safeguard social stability.
The responsibilities of the appeals office have changed, but not its operation. The most popular way to solve problems is to transfer cases. While Beijing oversees the rest of the country, it cannot take care of everything. Most petitions are transferred back to the local governments. Those who file these petitions follow the paperwork. If the local government cannot resolve the problem, the petitioners are sent back to Beijing. This process became a cycle that petitioners are forced to follow.

Currently, governments at all levels face major challenges in dealing with petitions:

The number of petitioners is increasing

From the State Council to provinces, regions and counties, there are offices where people visit and file petitions of grievances. According to statistics of the Appeals Office of the Ministry of Public Security, it has handled between 50,000 to 60,000 petitions per year in recent years. The Supreme Court and Supreme Procurator have handled around the same number of petitions. This amounts to over a million petitions per year.

Pressure on the local government

The Central Government pays much greater attention to problems brought by petitioners in Beijing. If many petitioners from the same area go to Beijing, the local officials are subject to punishment. Therefore, suppressing people who file petitions has become a new priority for local governments. In some places, people have been hired to monitor the homes of petitioners, but this has not been effective in stopping them from going to Beijing.

The root of the problem

Government departments are obsessed with bringing petitioners under control, but they tend to neglect the root cause of the petitions. A director in charge of one appeals office stated, "First of all, the public has more knowledge of the law in general, and the people are now different from the old days, when they did not know the law and shied away from lawsuits. Secondly, corruption has brought about many problems." He further pointed out that corruption and fraud at the village level have brought about many problems and weakened the state’s power at the local level. This director believed that inadequate initial handling of cases has also contributed to the rise in the number of petitions.
Inadequate system

Each petition or letter received by the Ministry of Public Security is registered in the computer. Those not under the jurisdiction of the Ministry of Public Security are transferred to the responsible departments. Those under its jurisdiction are sent via official memo, depending on the case, to the provincial department of public security. As for in-person visits by the petitioners, the same procedures apply. Staff members handle petitions differently depending on the situation. Possible actions include sending official memorandums to lower levels of public security departments requesting disposition, requesting the provincial departments of public security to provide results of preliminary investigation and written status reports, persuading petitioners to leave if the matter does not fall under the jurisdiction of the Ministry, and issuing transfer letters to those that need to go to different agencies.

An experienced appeals office staff member characterized the content of the petitions as "an infinite variety of social problems." Most of those who file petitions are from the countryside. They do not have much education, have little knowledge of the law, have no connections with people in power, and have no money to file lawsuits. Most of them sincerely and doggedly believe in the Communist Party and that the Party will find justice for them. When the local petition offices do not resolve their problems, they go up one level, hoping to find someone higher up in the government to champion their cause. Most of them end up in Beijing through this process.

The Appeals Office summarizes the cases in the petition via a "Petition Digest" as feedback to the leaders of the Ministries. One staff member stated, "Sitting here at the reception window of this office, you may come across anything, crimes, street safety, fires, matters involving foreigners ¡­ Any business the Ministry of Public Security handles, we have it. Anything it does not have, we have it also." Their greatest fear? That someone who petitioned at their office will make trouble at Zhongnanhai or Tiananmen Square, which would inevitably bring unwanted scrutiny and probably punishment from their superiors. They know that if the problem were not difficult or controversial, the petitioners would not have risked the high probability of retribution to come to Beijing.