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China Health and Safety: serious issues or protectionism?

China Health and Safety: serious issues or protectionism?

A couple of years ago, when the American economy suddenly found itself under threat from China manufacturing, a number of stories appeared in the Western media, alleging shoddy workmanship in the Chinese toy industry. This resulted in a clamour for the banning of unsafe imports in a wave of near hysteria, and a call for enhanced regulation to prevent accidents happening to children of American consumers.

It is now the turn of China's perceived lack of control of Health and Safety issues that is dominating the western press, with allegations surfacing that corruption is endemic and lays at the root of many issues that are now coming to the attention of the media. The calls for action have turned into a stampede following the high speed rail crash in July that killed 40 and injured 200, and has severely called into question the speed of deployment and general safety of this ' landmark ' China project. 

A review however of Health and Safety issues in China reveals an interesting theme, one of progress at great speed which has inevitably allowed corners to be cut, sometimes it would seem as a natural consequence of the speed of development, but often as the result of the culture of corruption that is frequently described as one of the main 'business risks' to those who do business in China.

The High Speed Train disaster. 

The high speed rail network is the flagship project of the China government, being one of the World's largest infrastructure projects in the last four years. It is only 3 years ago that the high speed rail took passengers from Shanghai Airport to Pudong ( leaving them stranded in a traffic jam a mile or so from their destinations), being one of the great experiences of a visit to China. The first planned journey opened recently, shaving over an hour off the 2 hour journey to Hangzhou, a fabulous City that is twinned with the City of Leeds. The speed of the train is simply stunning, and at only £5 [uk] far better value for a 7 minute ride than Alton Towers. A world record of 258.9 mph was recorded on the journey in 2010.

The network has grown at an alarming pace. Prior to the accident there were 18 daily services to Hangzhou and Beijing and more were planned to come on stream over the next few months. It is clear that China intended to export it's expertise in this field around the world, commentators have all indicated that the accident has severely affected the business prospects for this new form of transport.

Mr Luo Lin, director of the State Administration of Work Safety, who is heading the inquiry into the causes of the crash has said that there were 'serious flaws in the system design that led to equipment failure'. Officials had earlier said that the failure was due to signal failure. Questions had been asked about the constitution of the investigation that resulted in the removal of two officials from the railway ministry, the department that has come under the spotlight in the public outcry that followed the accident.

The Chinese news site Caxin has published a report that seems to put the cause of the accident on a red light warning system used to slow the train, and hints that they were used to enhance bonuses by taking unnecessary risks with the timetable. It also points to corruption and other ills in the State Signal and Communication department and the failure of an automatic backup safety system.

Construction

The exposure in the back streets of Zhengzhou of a 'stretching factory' that is involved in 'steel thinning' has called into question the safety of a number of China's new buildings. The process involves stretching of steel enforcement rods into a slimmer version, and then the sale of excess steel on the local commodity market.

The Times [14.9.2011] reported that a 'menu' discovered in a thinning workshop in Henan province, offers to diminish 6.5 mm reinforcement bars to 6 mm and 8 mm to 7mm, reductions that could prove critical. Developers who are suffering from over development in the affordable housing market may be tempted to cut corners, as happened in a recent inspection of such a project in Hainan project. 

This discovery has coincided with the drafting of new guidelines on strenghtening 'graft' risk prevention and control' in Beijing, which has been introduced to clamp down on endemic corruption. The new campaign, launched jointly by the Ministry of Supervision, the National Bureau of Corruption Prevention and the Communist Party's Central Commission for Discipline and Inspection, has said that it will target infrastructure and construction projects where there is a threat to human life.

 Battery factory lead poisoning

The BBC recently reported that battery factories around China have been closed following a number of cases of lead poisoning in the industry. 74 people have been detained this year after reports that 100 people have been affected by lead and cadmium poisoning. Reports have been made of numerous factories being closed down in an attempt by the regulators to 'clean up' this emerging business.

In Zheijang's Dequing county, 53 people were sent to hospital following tests on 332 residents. Several manufactures of batteries with shares traded in China have suspended production to investigate similar complaints. Other reports have emerged from Taizhou city where the state news agency reported the poisoning of 100 villagers including children from a battery factory. Warnings have been made not to consume food grown on land near to the factory due to contamination. In 2009 rioters broke into a smelting factory that had caused lead poisoning to 600 children.

China is one of the leading global producers of electric batteries. In 2005 there were 1,400 battery manufacturers, who produced 30.5 billion batteries, of which 13.9 billion were for the domestic market. Batteries are used in electric cycles predominately in the cities and mobile phones. Despite the introduction of new recycling plants in Beijing, only 5% of used batteries are recycled, causing a huge problem in illegal disposal with all the inherent risks.

Pesticides

The Chinese government has shifted policy towards intensive agriculture to provide food for is growing population. China accommodates 25% of the world's population on only 7% of the arable land available. Intensive practices include modern machinery and the increasing use of pesticides.

Although China is manufacturing its own pesticides, much of the material used is imported. A number of years ago, Professor Graham Mathews of Imperial College reported on the lack of health and safety measures and procedures in agricultural operations. He detailed lack of Personal Protective Equipment and a lack of pesticide calibration as being amongst the major failures that he had witnessed.

In 2010 the China Daily reported that there were numerous loopholes in the regulation of pesticides. A highly toxic pesticide was banned but had been discovered in tons of cowpeas from South China's Hainan province. The material, isocarbophos, is highly toxic and had been discovered in product recovered from several provinces. The pesticide is thought to sell on the open market for 5% of the cost of legitimate chemicals.

Enforcement of pesticide controls is clearly a difficult issue, as testing has to be carried out by enforcement officials on every farm or establishment that produces food. Food safety experts have pointed out that each test is expensive and it is clearly impractical to supervise this industry based on present funding levels. In 2009, China phased out the use of pesticides containing Persistent Organic Pollutants that can travel large distances through the air, as required by the Stockholm Convention. This enforcement action followed the banning in 2007 of 5 pesticides including methamidophos, that was being produced in 16 factories around China.

 Conclusion

Enforcement of product safety and health and safety is clearly one of the main challenges that China faces as it takes it's position as the main manufacturing nation in the world. Inspection of goods from China that are imported to the UK has been a necessary step in 'due diligence' for all UK importers. Despite the increase of procedures, test facilities and enforcement action on the ground, the problem seems to be getting larger rather than smaller.

It is easy however for the West to sit back and blame China for these problems, after all it suits the protectionist lobby in the USA to highlight these difficulties, whilst taking the spotlight off home grown problems. A recent study into working conditions at the Foxconn plant in Shenzen highlighted the number of suicides by employees, due to the regime of  working conditions. The factory makes components for Apple, who have also suffered reports of sickness to employees making their touch screens at a different factory in Taiwan. It has been easy for Western companies to distance themselves from local conditions, whilst reaping the benefits of price and lax enforcement. If things are to improve, corporate governance will have to strenghten 'self regulation', a term that has lost some of it's support due to difficulties in other areas of commerce.

For any advice and assistance for issues like these please do call Jeremy on 0844 2722322 or submit a comment below. Jeremy will come back to you at the earliest convenience.

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