Finally, in My Backyard

September 14th, 2008

One of my staff earlier this week traveled up to Beijing to meet an official with the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), to clarify some policy issues for a project. He said armed guards had surrounded the place, and he – a Chinese professional – was not allowed to enter the building. Instead, the government official had to come out to the street where my colleague waited to meet. For the next hour on the noisy, congested street corner they discussed central government policy, my co-worker sketching notes against a telephone pole.

When the staff member returned to our office in Suzhou he explained, “It was the first day of business for Central Government officials after the Olympics [lest we forget the Special Olympics], so there was still tight security. But the big reason was the Dairy Scare: they’re protecting the building against angry parents.” Little did my staff know but that same day Li Changjiang, the chief of  the very same Bureau, was being turfed from his office.

I’ve always been a proponent of the phenomenon that a society does not make long-term radical changes in its attitudes through the imposition of outside pressure, whether economic or at the end of the barrel of a gun. Like a teenager, societies just have to figure things out for themselves – usually, the hard way.

Case in point: despite multiple outcries from the international marketplace last year about Chinese quality and inspection issues ranging from tainted pet food that killed thousands of pets in the States, and lead-based paints on toys, and poisoned toothpaste and and and – it seemed you named the Chinese export last year and there was some problem with it – Chinese officials did not put the quality and inspection controls in place and the reward/punishment system to enforce the policies.

The Chinese response at the level of the vox populi was that the Western world was envious of China’s rise and was still after all these years bullying the country. The Chinese government’s response was to execute the head of the Chinese Food and Drug watchdog and to close a few offending factories. The problem, after all, was an internal matter and would be dealt with The Chinese Way. There was a clear sense publicly and privately that none of those issues were “Chinese” since they did not occur in China’s backyard, a domain in which a different physics is at work. Indeed, it all rather seemed yet another foreign plot to up-end China.

Now, pigs with blue ears aside, the country has to deal with an issue it could have been pre-emptive about: poisoned dairy products that have struck at the heart of the Chinese value  system – the Family and the infant. The tragedy still unfolding will eventually force a major revision of the quality and inspection protocols the government is responsible for.

The same can be said about Intellectual Property Rights. Now that the Chinese themselves have something to lose in a patent infringement case, they are the ones filing far more claims than foreign companies. A September 2008 article in the Shanghai Business Review entitled, “Patently Powerful,” cited:

“It is estimated that over 95 percent of patent disputes occur between Chinese companies… ‘The system will only improve by intra-China fighting,” says Elizabeth Chien-Hald, the founder of the Institute for Intellectual Property in Asia. ‘If it’s only foreigners using the IP system, it won’t gain traction – it will seem like a foreign system.”

Whether poisoned food stuffs or pilfered property, China has finally reached adolescence. I don’t expect it to be an easy phase.

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