Tuesday, August 07, 2007
Nothing is scarier than the China scare
Aug 4, 2007, Asia Times Online
By Debasish Roy Chowdhury
BEIJING - A new food scare has gripped the United States, with the US Food and Drug Administration (FDA) urging people to throw away more than 90 different products, made at a Castleberry's Food Co plant, from chili sauce to corned-beef hash to dog food, for fears that they are causing botulism, a muscle-paralyzing disease.
Seven cases of botulism have so far been reported. Most victims consumed a hotdog chili sauce made at the company's plant in the US state of Georgia that has been temporarily closed. The recall has been expanded to Canada as well.
Castleberry's is owned by Bumble Bee Foods, the largest branded seafood company in North America - not in China, the evil land from where all the toxic food and lethal products in the world supposedly emanate.
The list of product recalls in the United States in recent months is almost inexhaustible. In March, Ford Motor Co recalled 2008 Super Duty trucks made in a Kentucky plant after reports of tailpipe fires in the diesel version of the vehicles; in June, California-based United Food Group recalled 34,000 kilograms of ground-beef products after they were suspected to have been contaminated with the bacterium Escherichia coli (E coli); and in July, Sara Lee Corp began to recall dozens of its whole-wheat bread brands made at a Mississippi bakery for fears that they contained pieces of metal.
But the product scares and recalls the US media seem fixated on are the ones from China. It is the faulty tires, toothpaste, pet food, seafood and toys with a China connection that are making all the news, with cover stories, editorials and television programs harping on how China's "substandard" manufacturing methods are putting American consumers at risk, how the factory to the world is actually one big sham, and proffering ways to keep off products with any trace of China.
As a bonus, the China horror story even has a feel-good subtext - nothing can match US quality; if China makes goods cheaper than the US, now you know how: by cutting corners.
This fear of Chinese products is reinforced by administrative measures. At the height of the product scare, the US government quickly formed a cabinet-level panel to recommend how to guarantee the safety of imported food and other products. In this self-delusional world of policymaking, the Castleberry's and the United Food Groups do not exist, it is only the products coming from outside the United States that pose a threat.
Though it was denied that the move was aimed at China, the announcement came the same day US senators heard testimony from quality regulators about problems caused by the extremely rapid growth of imports from China.
That is really what this is all about - rising imports from China. It is not the Chinese-product scare; what is actually being played out is the China scare - the antiquated, mercantilist fear of imports that China's growing economic might evokes.
Chinese exports to the US last year were nearly triple those of just five years ago. Chinese exports to the United States totaled US$288 billion, while US exports to China totaled $55 billion.
But according to the Cato Institute, Americans have never earned or spent a higher share of their income in the global economy than they do today. In 2006, what the US earned through exports and income from foreign investments abroad reached a record 15.6% of gross domestic product. Since China's entry to the World Trade Organization in 2001, US exports to this country have grown from $19 billion to $55 billion, an annual average growth of 24%.
Despite the din about how China is getting ahead with its undervalued yuan, real output of US factories has increased by 50% since China pegged its currency to the US dollar in 1994.
Despite the rhetoric of how ("substandard") Chinese products are stealing jobs from Americans rendered powerless by this unforeseen consequence of globalization, trade with China accounts for a mere 1% of annual job displacement in the US.
By Cato's estimates, at the most 150,000 jobs are lost in the US every year because of imports from China, compared with 15 million jobs that disappear annually in the US economy primarily as a result of technological changes and the consequent increase in productivity.
Productivity gains have actually taken a bigger toll on employment in China than in the US. A study by Alliance Capital Management LP in New York finds that while the number of manufacturing workers in the US dropped by 11% from 1995 through 2002, in China it dropped by 15%.
And in any case, Chinese imports in the US are mostly replacing imports from other Asian countries, not US products themselves. And manufacturing is no longer the foundation of the US economy as it begins to de-industrialize as part of a global economic shift.
But then again, while there is no market for reason, there is a big one for fear. That is why a Utah-based health-food company has launched a new label and ad blitz promoting its products as "China-free". This is despite the fact that FDA records show China is not even the leading source of contaminated imports to the US. India and Mexico have surpassed China in "refused food shipments" over the past year, while the leader in rejected candy imports happens to be Denmark.
Why pick on China?
It is difficult to ignore the xenophobic, and even racist, overtones in the attacks against China. When the products are made in the US, it is just the company that is in focus. When they are found to have a China connection, even if it is a US company getting its products made in China, it is the country that takes the lashes, as if the company has no obligation toward quality control.
Protectionism needs a popular idiom. Xenophobia needs a whipping boy. China scare is the product of this marriage of convenience. As the poster boy of economic success and the visions it inspires of trumping the almighty US economy, China is the obvious target when it comes to manufactures. Much of the same is directed at India when it comes to services, with outsourcing fears often vented by Western callers in torrents of racist abuses on Indian call-center workers.
This xenophobia is what lies at the heart of the current product panic in the US. If unchecked, and recklessly fanned, this has the potential of derailing the very process of globalization that developing countries are betting on for a better future. That is scarier than the China scare.
Debasish Roy Chowdhury is a senior editor with China Daily.
(Published with permission of China Daily) ¶ 1:22 PM
By Debasish Roy Chowdhury
BEIJING - A new food scare has gripped the United States, with the US Food and Drug Administration (FDA) urging people to throw away more than 90 different products, made at a Castleberry's Food Co plant, from chili sauce to corned-beef hash to dog food, for fears that they are causing botulism, a muscle-paralyzing disease.
Seven cases of botulism have so far been reported. Most victims consumed a hotdog chili sauce made at the company's plant in the US state of Georgia that has been temporarily closed. The recall has been expanded to Canada as well.
Castleberry's is owned by Bumble Bee Foods, the largest branded seafood company in North America - not in China, the evil land from where all the toxic food and lethal products in the world supposedly emanate.
The list of product recalls in the United States in recent months is almost inexhaustible. In March, Ford Motor Co recalled 2008 Super Duty trucks made in a Kentucky plant after reports of tailpipe fires in the diesel version of the vehicles; in June, California-based United Food Group recalled 34,000 kilograms of ground-beef products after they were suspected to have been contaminated with the bacterium Escherichia coli (E coli); and in July, Sara Lee Corp began to recall dozens of its whole-wheat bread brands made at a Mississippi bakery for fears that they contained pieces of metal.
But the product scares and recalls the US media seem fixated on are the ones from China. It is the faulty tires, toothpaste, pet food, seafood and toys with a China connection that are making all the news, with cover stories, editorials and television programs harping on how China's "substandard" manufacturing methods are putting American consumers at risk, how the factory to the world is actually one big sham, and proffering ways to keep off products with any trace of China.
As a bonus, the China horror story even has a feel-good subtext - nothing can match US quality; if China makes goods cheaper than the US, now you know how: by cutting corners.
This fear of Chinese products is reinforced by administrative measures. At the height of the product scare, the US government quickly formed a cabinet-level panel to recommend how to guarantee the safety of imported food and other products. In this self-delusional world of policymaking, the Castleberry's and the United Food Groups do not exist, it is only the products coming from outside the United States that pose a threat.
Though it was denied that the move was aimed at China, the announcement came the same day US senators heard testimony from quality regulators about problems caused by the extremely rapid growth of imports from China.
That is really what this is all about - rising imports from China. It is not the Chinese-product scare; what is actually being played out is the China scare - the antiquated, mercantilist fear of imports that China's growing economic might evokes.
Chinese exports to the US last year were nearly triple those of just five years ago. Chinese exports to the United States totaled US$288 billion, while US exports to China totaled $55 billion.
But according to the Cato Institute, Americans have never earned or spent a higher share of their income in the global economy than they do today. In 2006, what the US earned through exports and income from foreign investments abroad reached a record 15.6% of gross domestic product. Since China's entry to the World Trade Organization in 2001, US exports to this country have grown from $19 billion to $55 billion, an annual average growth of 24%.
Despite the din about how China is getting ahead with its undervalued yuan, real output of US factories has increased by 50% since China pegged its currency to the US dollar in 1994.
Despite the rhetoric of how ("substandard") Chinese products are stealing jobs from Americans rendered powerless by this unforeseen consequence of globalization, trade with China accounts for a mere 1% of annual job displacement in the US.
By Cato's estimates, at the most 150,000 jobs are lost in the US every year because of imports from China, compared with 15 million jobs that disappear annually in the US economy primarily as a result of technological changes and the consequent increase in productivity.
Productivity gains have actually taken a bigger toll on employment in China than in the US. A study by Alliance Capital Management LP in New York finds that while the number of manufacturing workers in the US dropped by 11% from 1995 through 2002, in China it dropped by 15%.
And in any case, Chinese imports in the US are mostly replacing imports from other Asian countries, not US products themselves. And manufacturing is no longer the foundation of the US economy as it begins to de-industrialize as part of a global economic shift.
But then again, while there is no market for reason, there is a big one for fear. That is why a Utah-based health-food company has launched a new label and ad blitz promoting its products as "China-free". This is despite the fact that FDA records show China is not even the leading source of contaminated imports to the US. India and Mexico have surpassed China in "refused food shipments" over the past year, while the leader in rejected candy imports happens to be Denmark.
Why pick on China?
It is difficult to ignore the xenophobic, and even racist, overtones in the attacks against China. When the products are made in the US, it is just the company that is in focus. When they are found to have a China connection, even if it is a US company getting its products made in China, it is the country that takes the lashes, as if the company has no obligation toward quality control.
Protectionism needs a popular idiom. Xenophobia needs a whipping boy. China scare is the product of this marriage of convenience. As the poster boy of economic success and the visions it inspires of trumping the almighty US economy, China is the obvious target when it comes to manufactures. Much of the same is directed at India when it comes to services, with outsourcing fears often vented by Western callers in torrents of racist abuses on Indian call-center workers.
This xenophobia is what lies at the heart of the current product panic in the US. If unchecked, and recklessly fanned, this has the potential of derailing the very process of globalization that developing countries are betting on for a better future. That is scarier than the China scare.
Debasish Roy Chowdhury is a senior editor with China Daily.
(Published with permission of China Daily) ¶ 1:22 PM
