WHY THE WEST MUST REGULATE CHINA'S EXPORTS

 
Jeffrey Garten
Thursday, July 12, 2007
 
 
The escalating safety problems from Chinese exports of toothpaste, toys, tires and seafood is a deeply disturbing trend. The policy agenda is formidable.

Since Richard Nixon's first trip to Beijing, the west has wanted China to be fully enmeshed into the global economy. Few would have envisioned how quickly and extensively this would happen. It is now clear, however, that integration occurred without the proper domestic economic and social foundations – a recipe for big trouble.

10 July 2007, Beijing executed its former head food and drug official for bribery, but this is an extreme and unsustainable solution, if not a barbaric one. The fact is, China's entire regulatory system is far from western standards. It is not just that Beijing needs a better food and drug agency, important as that might be. Defective food is often a result of horrendous industrial pollution that has seeped into the water and soil. A new industrial model, allowing for rapid growth but dealing with environmental consequences – while mitigating the damage of the past – will be necessary but awesomely challenging. There is rampant counterfeiting of products, most of which circumvent inspection altogether. Only a permanent crackdown on violations of intellectual property protection will suffice, but progress on this front has been elusive for more than two decades. Massive corruption at the local level causes officials to turn the other way. It is not clear that Beijing can control this cancer.

The logistical system for food transportation is problematic, including a lack of refrigeration. With $1,200bn (�78bn) in foreign exchange reserves, China can cure at least this problem with investment. Nevertheless, the country lacks significant consumer advocates to blow the whistle; it does not have trade associations that police their members according to world standards; and its investigative media is not free enough to take on the government. Fixing all that could take at least a generation.

A second problem is that the west has failed to prepare for China's entry into the global economy. Washington has negotiated a raft of big trade agreements during the past quarter century, but it has not dealt with the need to upgrade regulatory vigilance. Exhibit A is the US Food and Drug Administration. Over the past decade the number of products it has inspected has tripled while its budget has remained flat. Exhibit B is the Consumer Product Commission, where staff have been cut and budgets reduced by at least 10 per cent over the past few years.

Larger budgets and better trained and remunerated personnel are only a start. The FDA inspects only 2-3 per cent of all incoming food. It now needs a dramatically new approach based on more intelligent risk assessment. It should not just spot-check incoming products but also demand from foreign countries with sub-par regulatory regimes vastly more information on how products are made, what ingredients they contain, how they are tested and how they are transported. In those countries, inspections should be extensive and intrusive. Most likely, a new bilateral treaty will be needed for the FDA to operate effectively in China.

America must also take a hard look at industrial self-regulation – the responsibilities of companies and trade associations to make their own investigations about product safety and to take appropriate action to mitigate risks. The burden is on US companies to act more forcefully than they have. Otherwise, government will take up that responsibility. Let us recall that when Washington examined self-regulation in the accounting industry in the wake of Enron and WorldCom, it chose to set up an oversight agency.

Finally, more co-ordination among national authorities is required so that global supply chains do not result in defective products travelling through unregulated channels. The system is no better than the weakest link.

It will be argued by some that a robust regulatory agenda will constitute protectionism, and this danger exists. However, few would deny that effective regulation on a domestic level is part of any modern economy, nor that with global trade growing twice as fast as global gross domestic product, the distinction between what is domestic and what is international has become blurred. Unfortunately, too, the rapid growth of global commerce that transmits life-threatening products is surely the fastest way to cause governments to erect trade barriers. Time for the regulators to get cracking.
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The writer is the Juan Trippe professor of international trade and finance at the Yale School of Management

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杀一个郑筱萸，管用吗？

 
作者：美国耶鲁大学教授杰弗里•加滕(Jeffrey Garten)为英国《金融时报》撰稿 2007年7月12日 星期四
 
 
中国出口的牙膏、玩具、轮胎及海鲜食品的安全问题愈演愈烈，形成一个令人极为不安的趋势。此事必须提上政策议程。

自理查德•尼克松(Richard Nixon)首次访华开始，西方世界就希望中国能完全融入全球经济。但很少有人预想到这种情况会发生得如此迅速、如此广泛。然而，人们现在清楚地看到，这种融合是在缺乏适当的国内经济和社会基础的情况下发生的——而这两个因素乃是避免出现巨大麻烦的前提。

2007年7月10日，中国政府以受贿罪处决了原国家食品药品监督管理局局长，但是，这就算不是一种野蛮的手段，也是一种极端的、不可持续的解决方法。实际上，中国的整个监管体系都与西方标准相差甚远。尽管中国政府需要一个更好的食品药品监管机构，这可能十分重要，但问题不仅于此。食品问题往往是由于可怕的工业污染物进入水和土壤而造成的。中国需要一种新的工业模式，一方面促成经济的快速增长，另一方面应对环境问题，同时减轻过去造成的损害。这种模式十分必要，但其挑战性也令人生畏。中国的盗版活动很猖獗，而其中大部分根本没有受到检查。中国政府必须持之以恒地打击侵犯知识产权的行为，但过去20多年来，这方面的进展一直不太明显。地方上大量的腐败行为导致官员们对此置之不理。目前，尚不清楚中国政府能否控制这种“癌症”。

负责食品运输的物流系统问题重重，其中包括冷藏设备的匮乏。中国拥有1.2万亿美元的外汇储备，至少可以用投资来解决这一问题。然而，中国缺少举足轻重的消费者维权人士发出警告；中国没有按照国际标准管理其成员的贸易协会；中国的调查性媒体还没有足够的自由来监督政府。解决所有这些问题，至少要花一代人的时间。

第二个问题是，西方对于中国进入全球经济没有做好准备。在过去的四分之一个世纪中，美国政府谈判了大量的重大贸易协议，但却忽视了提升监管水准的必要性。证据之一是美国食品和药物管理局(FDA)。在过去10年中，该部门检查的产品数量增加了2倍，而其预算却没有增加。证据之二是消费品委员会(Consumer Product Commission)，在过去数年中，该机构的工作人员少了，预算也至少削减了10%。

增加预算、加强培训、提高薪酬，都只是个开始。美国食品和药物管理局检查的产品仅占全部入境食品的2%至3%。现在，它需要在更有效的风险评估基础上建立一种全新方式。它不应只是对进口产品进行抽样检查，还应要求监管制度标准较低的外国提供更多的信息，包括产品的制作方式、含有的成分、检验方式和运输方式。在那些国家，检查应是广泛的、强制的。美国最好能够签订一项新的双边条约，以便美国食品和药物管理局在中国实现有效运作。

美国还必须认真对待行业自我监管：公司和贸易协会对产品安全问题进行自我调查并采取适当行动减少风险的责任。美国公司需要采取比过去更有力的措施。如果做不到，政府就应承担起这个责任。让我们回想一下，在安然 (Enron)和世通公司(WorldCom)的丑闻曝光后，美国政府对会计行业的自我监管问题进行了检讨，之后它选择建立一个监督机构。

最后，各国当局之间需要进行更多的协调，这样，全球供应链就不会出现问题产品通过监管不力的渠道运输到世界各地的现象。目前，这个体系几乎是最薄弱的环节。

一些人将辩称，一个强有力的监管议程将导致贸易保护主义。这种危险是存在的。然而，很少有人会否认，国内层面的有效监管是任何现代经济的一部分，而全球贸易额增速是全球GDP增速的两倍，国内与国际的区别已经模糊了。此外，不幸的是，传递生命危害性产品的全球商业迅速发展，无疑最容易造成各国政府建起贸易壁垒。监管者采取行动的时候到了。

作者是耶鲁大学管理学院(Yale School of Management)胡安•特里普(Juan Trippe)国际贸易和金融学教授。