China’s government is moving toward tighter regulations on the country’s exported and imported dairy products. The inspiration for the regulations came after traces of the potentially harmful chemical dicyandiamide was found in imported dairy products from New Zealand. These regulations show the government is conscious of its citizens’ health and intent to raise their standard of living.
This act may also offer an opportunity for Chinese companies to improve their standings in the country’s dairy market. China’s confidence in domestic dairy products is very low because of its questionable quality and has resulted in a great majority of dairy to be imported – even if it costs significantly more money and time. However, this gives an opportunity to China’s dairy producers to reclaim more of the market.
Chinese dairy producers would be able to offer products at a cheaper rate with a cooperative government (placing higher tariffs on imports, lower taxes for domestic producers, etc.) which I believe would have a beneficial impact on the Chinese economy. Not only could products be at lower rates, but domestic expansion could also mean higher employment for the country’s citizens in the long run.
Source: China Daily – USA
In tne background is a very substantial (and purely domestic) scandal not mentioned in the article, in which milk was laced with melamine. That made it test higher for protein, and so farmers (and dairy companies) could water down the milk. However, in [quite] high doses melamine is toxic to kidneys (it crystalizes). Now it’s children who are most likely to injest lots of milk relative to body mass, while mothers in China rely more and more on milk powder & baby formula. Put all this together and in 2008 roughly 300,000 babies were symptomatic, with 6 deaths linked directly to tainted milk. The government response was slow, starting with denial, and both the level of compensation of families and the lack of punishment (22 dairies known to be involved — this isn’t just the farm with 10 head, it’s the regional collection/processing end, big business). Adulteration is an issue with other crops, plus bad sanitation, and exports of various products (pet food in the US, dumplings in Japan) have either led to recalls or put people in the hospital. Now if you’ve every read the early 1900s muckrakers, we have our own history of adulterated food. Before refrigeration, milk in urban areas [there’s data for NYC] was routinely mixed with flour or even plaster dust, plus was just plain dirty. And that continued not for years but decades. So in our own history it was both and economic and ethical issue, and a political one because the industry was well connected and paying for a corps of inspectors was hardly a popular budget item.
So the real issue is domestic, “we’re doing something about the problem” is one aspect. The other is that it serves as a trade barrier so raises incomes of farmers and food processors. As the government becomes more concerned with popular support, measures to boost farm incomes will become more salient. Watch for other facets of the issue!