Monday, September 29, 2008 Oledan: Economic shift By Radzini Oledan
IT IS easy to be fixated and fall prey to hype.
The harmful milk, toxic toothpaste, pet food and even toxic toys are making the news, with everyone harping on how China's substandard manufacturing methods are putting global consumers at risk. Thus, ways are done to keep off products with any trace of China.
But it's the fixation anyway. And it is the fixation of the United States and the protectionism of its product. The subtext - nothing can match US quality, China makes good cheaper than the US by cutting corners and compromising quality standards.
If there is anything that has moved our custom officials and the Bureau of Food and Drugs Administration (BFAD), it is not out of so much concern for consumers but rather the global move to put an end to all of products that are made from China. For how do you explain several products that have been banned in the western shores and found their way to our supermarkets, without authorities lifting their fingers on it?
Besides, milk products whether coming from China or not have been found to be harmful to the health of babies and children, but multinational companies were able to wiggle their way out of the controversial Milk Code.
The issue is not the made in China products. It is not their substandard quality. It is the rising imports from China that threatens the economic giant.
It's the mercantilist fear of imports that China's growing economic might find its way to the global market.
The fear of Chinese products is reinforced by administrative measures. The US government has formed a cabinet level panel to recommend how to guarantee the safety of imported food and other products.
The delusion: only products coming from outside the United States pose a threat. This, despite the fact that two of its big food producer -- Castleberry and the United Food Groups -- were found to have sold toxic products in the market.
Economists say that 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 only totaled $55 billion.
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 percent 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 percent.
China is getting ahead and their products are stealing jobs from Americans who were also rendered powerless as a consequence of globalization and trade. By Cato's estimates, at the most 150,000 jobs are lost in the US every year because of imports from China. FDA records show China is not the leading source of contaminated imports. The leader in rejected candy imports happens to be Denmark.
There is no market for reason, but there is a big one for fear.
Beneath the surface, the scare issue is China's economic development, which has become a major economic menace for other countries. China's rapid growth is being pitched as a force undermining the global economy.
There are racist overtones in the attacks against China. If unchecked, and recklessly fanned, it has the potential of derailing the Asian economy. One thing is sure, China's entry and acceptance to the World Trade Organization will not be smooth.
