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The China Effect
China’s recent manufacturing mishaps have put the nation on everybody’s radar, including quick-service operators.

2007 is just over halfway finished, and, to date, tainted or recalled Chinese imports have made the national news four times. First it was poisoned pet food, then unsafe seafood followed by antifreeze-laced toothpaste. Mattel toys containing lead paint was the latest. In fact, the number of Chinese-made products recalled has doubled in the last five years and accounts for 60 percent of all the consumer-product recalls and 100 percent of the toy recalls this year, according to the Consumers Union, the independent, nonprofit testing and information organization that publishes Consumer Reports.

As China gets richer and the legal system is more developed, food safety will naturally improve.”

In response to the negative press and lagging consumer confidence, the Chinese government recently issued its first white paper on food safety. The report noted that China will improve supervision of food and drugs, adding it hopes to nip the problems in the bud. China “has built and improved a supervisory system and mechanism for food safety, strengthened legislation and the setting of relevant standards, exercised strict quality control regarding food, actively promoted international exchanges and cooperation in this respect, and has greatly raised public awareness of food safety,” the paper stated. Its food safety campaign will focus on produce, processed food, pork, imported and exported goods and products closely linked to human safety and health. But China’s intentions might not be enough to solve the problem.

“Local [Chinese] leaders have a strong incentive to promote economic growth and may sacrifice safety for profits,” says Dr. Jim Dorn, professor of economics for Towson University and China Specialist, Cato Institute. “In the long run, as China gets richer and the legal system is more developed, food safety will naturally improve.”

Until then the United States faces a supply issue with one of its major food suppliers. According to a July report by the Congressional Research Service, Chinese food exports to the U.S. have more than tripled from 1996 to 2006 to 1.8 million metric tons.

House Energy and Commerce Chairman John Dingell, D-Mich., recently proposed a bill that gives the Food and Drug Administration (FDA) mandatory recall authority, requires country-of-origin labeling on food, establishes a certification program for importers, limits ports where imported food can enter, and allows the agency to collect user fees to pay for increased import inspections. Meanwhile, the FDA is responding to consumer concerns by increasing border inspections in the United States, closely analyzing food imports from third-world countries and China.

But neither the FDA nor any other U.S. agency can fix China’s problems, says Michael T. Roberts, a lawyer with Venable LLP, who specializes in Chinese issues.

“China is a sovereign nation with its own national food law system and culture,” Roberts says. “The U.S. is not going over to China and solve its problems.”

Meanwhile, U.S. food companies, retailers, and restaurants have taken precautions to keep Chinese products from their establishments. But keeping Chinese food and preservatives out of quick-service kitchens might be impossible, says Roberts.

Roberts says most of the world’s supply of ascorbic acid, a ubiquitous preservative used in many food products, comes from China, as well as about half of the U.S. apple juice supply.

“China is a big supplier of seafood and wheat gluten, all products that can work their way into fast food,” Roberts says. “Rather than ask the question as to which fast-food product is from China, you could ask which food product does not contain any ingredients from China. The answer is still unknown, but at least the question starts with the right presumption.”

As for the major brands operating in China, Yum! Brands and McDonald’s, “their international reputation is at stake, and Chinese consumers are increasingly aware of tainted food and are demanding safer food,” Dorn says. “As the Chinese legal system matures, both domestic and foreign food handlers will be increasingly subject to civil suits for tainted products.”

Fred Minnick writes for QSRmagazine.com.