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Tainted Pet Food A Dragon Killer? High Level US - China Trade Talks Begin

High level economic talks begin between the US and China today. The US is asking for greater access to markets, particularly in the areas of banking and energy, and a greater trading range for the Yuan agains the US Dollar. The Chinese are attempting to head off protectionist tendencies that have arisen from a growing trade imbalance, percieved closing of the Chinese market to foriegners, and suspected currency manipulation which makes American goods more expensive.

It is expected that the Chinese will announce that they are cutting tariffs on the imports of energy services and technologies, which would boost the market for U.S. products. The Chinese are also expected to increase the stake U.S. and other foreign companies can own in Chinese banks. That ownership level is currently capped at 25 percent. In return I suspect that they expect the US will slow or halt the progress on bills which would apply penalty tarriffs on Chinese goods and direct the President to file a WTO case on the suspected currency manipulation. Measures the Chinese have called “absolutely unacceptable”

I doubt these talks will have much impact as lawmakers have already said they are not impressed with Beijing’s announcement that it will allow the Yuan to trade in a wider range against the dollar. Sen. Charles Schumer (D-NY) said it’s a “nice gesture, but in the past, most of their gestures have not produced any concrete change.”

Feeding into lawmaker’s anger is the recent tainted pet food scandal. Already facing a reputation as a nation of counterfieters and makers of low quality goods, the Chinese have been battered by the idea that their food exports are unsafe.

via the Salt Lake City Tribune

Already, one of the largest pet food recalls in American history has heightened global fears about the quality and safety of China’s agricultural products. And evidence has shown that China exported fake drug ingredients that could undermine the credibility of another booming export.

‘’This isn’t an international crisis yet, but if they don’t do something about it quickly, it will be,’’ says David Zweig, a China specialist who teaches at the Hong Kong University of Science and Technology. ‘’The question is whether it spills over and ‘Made in China’ becomes known as ‘Buyer Beware.’ ‘’

With contamination spreading to meat and fish supplies, some of America’s biggest food companies, such as Kraft Foods, are lobbying the U.S. government to pressure China to improve its food safety measures.

Kraft, the Kellogg Co. and other food companies have said they are reviewing their own food safety procedures and upgrading equipment. Their executives worry that another scare involving China could set off a consumer backlash against Chinese or other foreign imports and reverse a trend that has seen large food makers grow increasingly dependent on processed ingredients from developing countries.

Experts also say doubts about the quality of China’s food shipments and worries about its fake drugs could affect other exports if buyers begin to find safety problems or other product faults.

The frequency of recalls of Chinese imports has risen in recent years, according to the Consumer Product Safety Commission.

…

‘’We’re now learning some of the dirty secrets behind this fast-growing economy,’’ said Wang Fei-ling, a professor of international affairs at the Georgia Institute of Technology. ‘’They’re cutting corners in making things.’’

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In some places around the world, reaction has been swift. In Europe, food safety authorities are testing all Chinese protein imports for melamine. In South Korea, the CJ Corp., one of the country’s largest food and feed makers, said last week that it was recalling 42 tons of wheat gluten from China, even though the products had not tested positive for melamine.

Some Chinese exports are feeling the pinch.

‘’A Spanish company came to visit us and was planning to buy our product,’’ said Sun Hong, chief executive of Sanfu Biochemical Co., a rice protein maker in Hangzhou. ‘’We were going to strike a deal at the end of the month. But after what happened in the U.S., they haven’t even replied to our e-mail.’’

Experts say that to restore confidence in the country’s products and its currency, China needs to confront the issue and not be seen as covering up or delaying the release of information, which seemed to be the case during recent outbreaks of severe acute respiratory syndrome, or SARS, and bird flu. In similar fashion, after the initial news about melamine came out, China denied having shipped any wheat gluten to the United States, and one official said melamine could not have harmed pets.

Only after an international storm surrounded the case in mid-April, and Sen. Dick Durbin, D-Ill., publicly rebuked China for its response to the investigation, did China fully cooperate with American regulators

The Chinese apparently never learned that you don’t mess with a man’s dog and now it may bite them on the a**