Opinion & Commentary
Tainted Milk Is Part Of A Bigger Problem For Chinese Civil Society
The tainted milk scandal in China – with four deaths and 54,000 children ill and rising – exposes a glaring contradiction about Chinese civil society: despite having more public officials per capita than any other country in Asia, enforcement of its rules and regulations has been getting worse. For example, during the Tang Dynasty (618-907), there was one official for every 2,927 people. During the more recent Qin Dynasty (1644-1911), there was one official for every 299 people. In modern China today, there is one official for every 37 people. Its bureaucracies certainly cannot complain about being under staffed.
Yet, despite poor implementation of its rules and regulations, China actually has reasonable laws about things such as food quality and lead content in paint. Moreover, Sanlu, the company responsible for the melamine laced milk powder is not a small, anonymous producer. It is one of China's 'big six' dairies that is part owned by New Zealand based global giant Fonterra. We are told that Sanlu had been asked to issue a recall of the tainted milk powder as far back as August 2. Complaints about the milk powder go back as far as February and rumours about putting melamine in the milk powder surfaced back in 2005. Yet, it was not until September 11, when 500 babies had fallen ill, that a total recall was issued. The safety regulations and procedures were in place. But they just were not followed. It was only after the inevitable public outcry following tens of thousands of babies falling ill that the central authorities started to act.
And such action has been swift. State media showed Premier Wen Jiabao studiously 'inspecting' milk products in a supermarket on September 15. The head of China's standards watchdog Li Changjiang has resigned. Importantly, President Hu Jintao has criticized local officials for their "perfunctory work style, lax management and lack of responsibility." President Hu ended with a broader message: the Chinese Communist Party (CCP) "faces an unprecedented heavy task in building itself."
It is clear that rising number of officials has not lead to a better enforcement and regulatory system in China. In fact, it is a symptom pointing to serious problems.
China was decentralized following reforms because, in theory, local authorities should be better placed not only to efficiently allocate public money but also provide better enforcement and implementation of rules and laws. Local governments account for about three quarters of public expenditure, and even monies spent by central governments is largely administered by local authorities.
But while China has been decentralizing and officials have multiplied, it is not building institutions that encourage public accountability. It's hard to build 'rule of law' when the Party controls both the courts, tribunals and enforcement of laws. It's hard to have transparency when the Party controls the media. It's hard to make local officials accountable when Beijing relies on them to maintain the CCP's hold on power in far flung places.
Moreover, if you think that China is well on its way to becoming a private enterprise free market economy, think again. The state remains a significant player in the Chinese economy. State businesses receive over 70 percent of the country's capital. The state owns over 60 percent of the country's fixed assets. Even for a private company like Sanlu, the single most important factor for business success is to have good relationships with their local officials. Local officials control the dispensation of capital, land, and sometimes even labour. If they want to obstruct businesses with red tape, they can, and there is little recourse. The explosion of officials in China has seen the explosion of unaccountable bureaucrats each getting a slice of power, money, and influence. The problem of corruption is much worse and harder to root out when you have tens of millions of unaccountable officials compared to just a few hundred or thousand unaccountable ones at the top.
Ask almost any successful private business in China and they will tell you that being 'partners' of the state is essential. It is not a statement of preference or ideology but of practical necessity. Local officials in China are king makers and are used to doing as they please. State-owned and most large private businesses need to work hand in glove with them. It is no wonder that as China gets richer, becoming an official is a plum job and the size and prevalence of corruption deepens.
It is clear that local officials had little interest in enforcing the relevant food standards. It is also clear that officials initially tried to cover up the contamination of the milk powder and resisted the recall of products even though they were advised to order it. And it is also clear that these officials were reprimanded by Beijing only when the outrage became too loud to ignore.
