Wednesday, August 15, 2007

Made and Poisoined in China

The recall of more than 18 million and 1 million toys for kids (which were made in China) respectively formulated by Mattel and Fisher Price should force us to think about the limits of market economy as Milton Friedman and Friedrich von Hayek conceived it.


As China advances more and more toward impressive economic growth, we are starting to see more and more the dark side of what we like to call the "Chinese Miracle". Indeed, some Chinese products, before and after their exportation in the West, are poisoned. Last month we've heard about Chinese toothpastes and medications that contained antifreeze.

This time, it's about a high-profile recall of more than 18 million toys by Mattel, an American company, and another recall from Fisher Price involving 1 million toys that are not what they seem to be. This had to be done because of fears that the painting on these toys for kids, which were made in China, may contain excessive quantity of lead according to the U.S. Consumer Product Safety Commission (CPSC). After all, isn't that true that some kids can put toys in their mouth?

The answer is obviously yes.

What is a little bit intriguing is that a few years ago, American authorities didn't hesitate to block their importation of Canadian meat by saying that it is affected with mad cow disease. Now, can we say that the USA, if not the West in general, has waited for so long to notice that some Chinese products don't meet general quality standards?

Still, there are conclusions that we can draw from this experience. The recall of more than 18 million and 1 million toys for kids (which were made in China) respectively formulated by Mattel and Fisher Price should force us to think about the limits of market economy as Milton Friedman and Friedrich von Hayek conceived it.

As Canadian political scientist André Laliberté pointed it out, the main reason why China's economy is growing so quickly is almost due to the absence of governmental intervention in the economy. As a matter of fact, entrepreneurship is well perceived in this Asian country and add to this situation most Chinese's patent fascination for capitalism. Unfortunately, in China, underground and illegal economic activities do happen a lot.

This doesn't necessarily mean that China, as the world first producer of toys, is not serious. In fact, Chinese authorities forbade two factories from exporting poisoned toys. This probably means that China cares a lot about its economic relations with the whole world.

Besides, let's remember that the Chinese government has at least a dozen of inspection agencies checking nationwide ordinary stuff like appliances, food, medications, toys and you name it. The problem is that some employees of these inspection agencies can get bribed by an entrepreneur who wants to avoid product inspections. Still, Chinese authorities were (literally!) so serious that they has once charged a former inspection agent with death penalty.

Nonetheless, the problem that we have here is that whenever someone blew the whistle, Chinese officials has always taken firm decisions in response to fears expressed by Westerners.

With that said, we can't really start wondering if Chinese inspection norms for products are serious. What we should really wonder is that no matter how serious China is, economically speaking, are there any national inspection norms in this Asian country? The concept of market economy has its share of good aspects. However, what we should all know is that any government must find a balanced way to make economic intervention - just to make sure that things are ok - without posing a barrier to economic growth.

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