America's Future Update on China

Update on Food Safety in Chinese Products

Oak Brook, IL-based McDonald’s is facing a new food scare, denting the fast-food companies’ efforts to shore up their reputations still hurt by a 2012 scandal in one of their biggest markets. McDonald’s and KFC Parent Yum apologized to customers after Chinese regulators shut down a local meat supplier after a TV report showed workers picking up meat from a factory floor, and mixing meat beyond its expiration date with fresh meat. The companies said they immediately stopped using the supplier, Shanghai Husi Food, and switched to alternatives.

An earlier scandal in 2012 also involved the same companies; that scandal involved chicken pumped with excessive amounts of antibiotics. All KFC and Pizza Hut restaurants are now required to stop using meat materials supplied by the Husi factory.

McDonald’s and Yum are the two top brands of sales in China’s fast-food market. News of the scare spread rapidly to lunch-hour diners, but Chinese consumers may be accustomed to food scandals. "Isn’t everywhere like this?" asked one student eating a Shanghai burger.
Chicago Tribune, 7-22-14

Update on Dishonesty of "Free" Trade

The World Trade Organization (which is never any friend of the United States) has ruled that the U.S. improperly applied punitive tariffs on steel, solar panels and other imports from China and India. This is a major blow to U.S. efforts to challenge the way China and India subsidize their products, and also shows the dishonesty of so-called "free trade."

The WTO rulings highlight the fact that Communist China owns its major companies and can manipulate the price of goods for export. The U.S. has been trying for years to build a case against Chinese state-owned companies, saying they benefit from both overt and hidden subsidies that unfairly lower their cost of production.

Government subsidies for export industries are supposedly banned by the WTO. But the new ruling says that state-owned companies could not be considered "public bodies" simply because they are majority-owned by the government. Instead, the panel said, the U.S. had to prove that Chinese state-owned enterprises also performed "government functions" or exercised "government authority." Financial Times, 7-15-14

This new WTO ruling challenges many tariffs imposed by the U.S between 2007 and 2012, and will restrict our use of tariffs as punitive tool and force us to revise our tariffs.

Major Newspapers Say "Beware" of Food From China

The Wall Street Journal gave us some hard facts about the food safety problem with China’s food products. The newspaper described "a particularly gruesome video of workers repackaging rotten meat" for McDonald’s and KFC chicken. Shanghai Local media reported that the managers had instructed employees to reprocess year-old meat and then sell it to other countries.

The behavior of this Husi Food Co. is a classic case of "quality fade," a term that means companies that start out with high-quality products and then cut corners in alarming ways, such as the 2007 scandal of using lead-based paint in children’s toys. According to the Journal, even "the Communist Party can’t protect the people from the depredations of its own elite."

Wal-Mart in China was also caught earlier this year when meat packaged as donkey turned out to contain fox. Wall Street Journal, 7-25-14

The New York Times ran an editorial, "Anything Goes in China’s Food System," reciting a series of incidents involving poor sanitation, expired meat, false labeling, and toxic ingredients like cadmium. The Times concluded by demanding stronger enforcement of China’s food regulations, but a better question is why any food is allowed to enter the United States after being grown or processed in China. 7-25-14