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Of Milk and Spacemen: The Paradox of Chinese Power in an Era of Risk

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Abstract

International headlines recently presented two very different narratives of Chinese power. One was the story of China’s first spacewalk, epitomizing its significant economic and technological progress in the past thirty years of reform. The other was a sad tale of tainted milk, thousands of sickened children, and recalls of Chinese milk products in 30 countries. How is it that China can send astronauts to walk in space but is unable to produce a decent glass of milk? This contrast was not lost on Chinese observers. After the spacewalk, Xinhua, the official Chinese news agency, commented that the space scientists should be held as a model of professionalism for all of society - not just for the high technology they used, but, more importantly, because of their rigorous adherence to high professional standards. “While tainted milk has cast the brand of China-made into international humiliation, another China-made product, the Shenzhou VII spacecraft, brought pride and glory to the country’s 1.3 billion people,” said Xinhua reporter Chang Ai-ling. Sanlu, the Chinese firm at the center of the September 2008 milk crisis, was the official dairy supplier to the Chinese space program.
209
S/S
2009
 ,  
209
Copyright © 2009 by the Brown Journal of World Affairs
E W is an Assistant Professor of Political Science at Montclair State University and an
Adjunct Associate Research Scholar at Columbia University’s Weatherhead East Asian Institute. Her re-
search focuses on Chinese foreign policy and non-traditional security. Her current book project, China as
a Risk Society, examines how transnational problems originating in China shape Chinese foreign relations
with neighboring states and involve Chinese civil society in foreign policy. She would like to thank Nick
omas, Yanzhong Huang, and anonymous reviewers for their helpful comments.
Of Milk and Spacemen:
The Paradox of Chinese Power in an Era of Risk
E W
Assistant Professor of Political Science
Montclair State University
I     very different narratives of
Chinese power. One was the story of Chinas first spacewalk, epitomizing its significant
economic and technological progress in the past thirty years of reform. e other was
a sad tale of tainted milk, thousands of sickened children, and recalls of Chinese milk
products in 30 countries. How is it that China can send astronauts to walk in space
but is unable to produce a decent glass of milk?
is contrast was not lost on Chinese observers. After the spacewalk, Xinhua,
the official Chinese news agency, commented that the space scientists should be held
as a model of professionalism for all of society—not just for the high technology they
used, but, more importantly, because of their rigorous adherence to high professional
standards. “While tainted milk has cast the brand of China-made into international
humiliation, another China-made product, the Shenzhou VII spacecraft, brought pride
and glory to the country’s 1.3 billion people,” said Xinhua reporter Chang Ai-ling.1
Sanlu, the Chinese firm at the center of the September 2008 milk crisis, was the
official dairy supplier to the Chinese space program.2
It may not be possible for dairy workers to model themselves on the space scien-
tists, since a successful space program and a reliable milk industry require completely
different strengths. e space program, like the Beijing Olympics, highlights Chinas
ability to mobilize economic, technological, and human resources in support of a
national goal that places China on the global stage.
Producing a glass of milk that meets health and safety standards, on the other
     
E W
210
hand, showcases all of the weaknesses of the Chinese political and economic system:
poor enforcement of national standards at the local level, inadequate regulation, and
a lack of accountability and transparency.3 At a time when Chinese leaders seek to
enhance their country’s soft power overseas, the Chinese brand has become tainted,
leading countries like the United States to impose new import restrictions on Chinese
food products.
For Chinese citizens, already outraged at the shoddy school construction that may
have led to unnecessary child deaths during the Sichuan earthquake, the milk scandal
highlighted the inadequate concern of the Chinese government and industry for the
safety of their own people. In a similar fashion to how the ill-timed SARS crisis, which
first appeared in the midst of leadership change in Beijing, created disincentives for
prompt and transparent reporting, problems with Sanlu milk appeared in the months
leading up to the Olympics, as Chinese authorities sought to guarantee the quality of
food available to athletes and visitors. e vigilance taken on behalf of Chinas foreign
guests contrasted poorly with the initial reluctance to take seriously questions about
tainted milk for domestic consumption. Even at the Olympics, concerns about food
safety, air pollution, and human rights served to expose the fault-lines in the Chinese,
system despite efforts to accentuate its successes.4
For the United States and other countries, the confluence of the milk scandal
and the spacewalk highlights the paradox of Chinese power: Chinas weakness in food
safety poses a different set of challenges than its military-economic strength and requires
an entirely new set of policy responses. Accustomed to focusing on the consequences
of China’s rising economic and military power, U.S. policymakers also will need to
manage the risks that Chinese regulatory weakness poses to a globalized food supply
chain, as well as to the global environment and public health.
Chinas high-TeCh TaikonauTs
Unlike the milk industry, which has proven to be woefully deficient in quality control
and raised alarms about Chinese food safety practices in general, the space sector displays
Chinas economic and scientific strengths. In 1992, Jiang Zemin, China’s former top
political and military leader, launched Project 921, China’s manned space program,
at a time when China’s economy was just taking off.5 For Chinese officials, the space
program has particular symbolic value in that it highlights their countrys comprehensive
national power and prestige.
Although it is difficult to establish the cost of China’s space program (estimates
begin at $2 billion annually), its benefits have been felt throughout the Chinese
economy. e space program has served as a catalyst for training Chinese scientific and
Of Milk and Spacemen: e Paradox of Chinese Power in an Era of Risk
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engineering personnel, encouraged technological innovation, and improved quality
control standards to support manned missions.6 At the same time, the Chinese space
program is centrally directed, reflecting the close integration of its military and civilian
components.7
On the afternoon of 27 September 2008, the Shenzhou VII mission accom-
plished Chinas first spacewalk, forty-three years after the Soviet Union and the United
States. China is now among only three countries to have the capacity to send people
into space. Zhai Zhigang, one of
the three taikonauts (the Chinese
term for astronauts) wore a Feitian
spacesuit believed to have cost $4.4
million, not including the intellectual property transfer fees, which, by some estimates,
would at a minimum be equal to the cost of the suit. Using Russia’s state of the art
Orlan spacesuit as a model, the Chinese Academy of Space Technology designed and
produced the Feitian. In 2004 China purchased nine of the Russian suits, which, with
some modifications, were also used in the September 2008 mission.8
Although the Chinese government claims it is committed to the peaceful ex-
ploration of outer space and has proposed signing an international agreement on the
issue, Beijing’s accomplishments in the space sector have military consequences for
the United States and other countries. As the U.S. Department of Defense reported to
Congress this year, the Chinese military is working to improve its space-based C4ISR
(command, control, communications, computers, intelligence, and reconnaissance),
which are essential for the joint operations needed in modern warfare.9
China is also developing the capability to deny C4ISR capabilities to potential
enemies during a crisis or conflict. For the DoD, China’s successful test of an anti-
satellite weapon in January 2007 against one of its own weather satellites showed that
the Chinese military’s “interest in counterspace systems is more than theoretical…”
by highlighting that China already knows how to disable and impair satellite systems
in a low-earth orbit.10
Shenzhou VII, which also launched a small BX-1 companion satellite to take
pictures of the mission, is part of a larger program to develop a space lab by 2011 and
achieve a manned space station by 2020. A special base is being built on Hainan Island
for launching rockets to service the space station. China also is competing with India
to achieve a lunar landing and is developing a commercial satellite industry. Because
the Shenzhou VII and BX-1 passed in close proximity to the international space sta-
tion, some experts speculate that China is seeking to improve its space surveillance
capability.11
The milk scandal highlighted the inadequate
concern of the Chinese government and
industry for the safety of their own people.
     
E W
212
MelaMine, MelaMine everywhere
In contrast with the space sector, which benefits from high-level political and military
support and attracts both the best personnel and the most advanced technology, the
Chinese dairy industry is decentralized, involving millions of individual farmers who sell
their product to largely unregulated middlemen. e latter collect and trade the milk,
which then is sold to large, mostly state-owned brand-name firms. China is now the
world’s third largest milk producer, though many of its dairy firms saw profits decline
in 2007, as more and more small companies entered the market producing low-quality
milk––mostly in the form of milk powder.12
To increase volume, unscrupulous middlemen diluted the milk they sold and
then added melamine to mask the dilution and satisfy minimum government require-
ments for protein content. Melamine, a nitrogen-based compound, normally is used
in making plastic tableware and surfaces and also can be found in fertilizers in some
countries. When added to milk, it provides the appearance of boosted protein content
because protein is usually the only source of nitrogen in food. Melamine is not normally
toxic for adults who ingest it accidentally, but children may develop kidney stones or
experience kidney failure.
On 10 September, Xinhua first reported that Gansu province health officials were
investigating Sanlu milk powder for melamine contamination because of reports of
kidney stones in infants who drank the product.13 At first, Sanlu officials denied produc-
ing the tainted milk, but then decided to recall 8,210 tons of milk powder produced
before 6 August. On 13 September, the Chinese Ministry of Health recalled all Sanlu
milk powder, and two days later Sanlu apologized.14 Ironically, Sanlu, a state-owned
enterprise, had been exempt from required quality control inspections because of its
status as a major name brand. As recently as 2 September, a Chinese Central Televi-
sion (CCTV) program, Weekly Quality Report, sponsored by Chinas Administration
of Quality Supervision, Inspection, and Quarantine, had praised Sanlu for its high
quality products.15
Within days of the first official Chinese reports of the scandal, it became clear that
evidence of the tainted milk had been suppressed for some time. A Nanjing newspaper,
Yangzi Evening News, reported in March that medical researchers in Nanjing had seen
samples of kidney stones from infants.16 At that time, Sanlu also received complaints
from consumers about “red urine” and kidney stones in babies who drank the milk.
A Wenzhou man claimed on various blogs to have returned some packs of Sanlu milk
powder to the company, fearing they were fake, due to his daughter’s reaction to them.
e company insisted they were genuine but refused to provide test results. When the
man kept complaining, the company reportedly offered him 2,500 yuan ($364) in milk
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powder to stop talking about the case, which he accepted.17 At the very least, Sanlu
must have known by 2 August, since at that time the company asked the Hebei city
authorities for help in managing the negative news about melamine and in cracking
down on illegal dairy farmers who they claimed were responsible.18
Fourteen cases of babies with kidney stones appeared in No. 1 PLA Hospital
in Lanzhou, Gansu beginning on 28 June. ree other hospitals in the city reported
receiving similar cases. Cases then emerged in Jiangsu, Ningxia, Shaanxi, Shandong,
Anhui, and Hunan provinces.19 Nanfang Daily reported that an inquiry about the
Sanlu milk had been posted on the China’s Administration of Quality Supervision,
Inspection, and Quarantine website on June 30th, but the agency claimed an investiga-
tion required more information.20 Gansu health authorities acknowledged they were
informed about the milk contamination on 16 July, but only told the quality control
agency on 9 September, which then began investigating. Hunan cable television, Legal
Weekly, and Southern Weekly also covered the issue in July, but then editors abandoned
the story during the Olympics, as the Communist Party propaganda department urged
the media to focus on the positive.21
Meanwhile, back in Shijiazhuang, Hebei province, where Sanlu is headquar-
tered, Fonterra, the New Zealand company that owns 43 percent of Sanlu, told local
authorities on 2 August that they suspected contamination. ese officials failed to
inform the Hebei provincial government until 8 September. is lag coincided with
the Beijing Olympics, from 8 August to 24 August, a time when Chinese Communist
Party propaganda department cautioned against reporting on food safety issues.22 Sanlu’s
chairwoman, Tian Wenhua, also a local communist party secretary, faced double incen-
tives not to report any possible concerns about the milk powder.23 e company was
the largest seller of baby milk powder in China (18.3 percent of sales in 2007) and the
second biggest in world. Sanlu also was the biggest employer in Shijiazhuang, with a
workforce of 10,000.
Concerned by the lack of response by their Chinese partner, Fonterra then advised
New Zealand Embassy officials on 14 August. After some additional investigation by
New Zealand authorities, then-Prime Minister Helen Clark was briefed on 5 Septem-
ber. Circumventing Hebei provincial
authorities, she directly notified cen-
tral authorities in Beijing on 9 Sep-
tember.24 Prime Minister Clark later
criticized Fonterra for its mishandling
of crisis.25 e New Zealand company
argued that it was following established procedures by turning to their Chinese partners
to handle the contamination through their own channels.26 In the end, this decision
The Chinese dairy industry is decen-
tralized, involving millions of indi-
vidual farmers who sell their product
to largely unregulated middlemen.
     
E W
214
cost Fonterra $139 million, as the value of Sanlu shares plummeted.27 Fearing damage
to its brand’s reputation, Fonterra donated $8.4 million to a Chinese charity to set up
clinics in rural areas for maternal and infant care.28
After initially attributing four deaths and 53,000 children hospitalized to kidney
problems related to the milk, the Chinese Ministry of Health later acknowledged a more
widespread problem. An official statement issued on 1 December 2008, revealed that a
total of 294,000 children had been treated for symptoms and six had died.29 Ultimately,
22 companies were found to have been involved in the scandal, including three other
major brand-name dairy companies: Mengniu, Yili, and Bright Dairy. Melamine also
was found in animal feed and eggs in several Chinese provinces.
Two men were sentenced to death for selling melamine to the dairy firms, but
Tian Wenhua, Sanlu’s chairwoman, received life in prison, a discrepancy that led some
Chinese netizens to accuse China’s courts of treating her excessively leniently because
of her prominent position.30 During her trial, Tian admitted that consumers had
complained to the company about the milk since 2007 and that she knew about the
melamine contamination by May 2008, nearly three months before reporting it.31
Although lawyers filed a class action suit on behalf of the melamine victims against
Sanlu and 21 other dairy companies, it remains unclear whether or not the case will
move forward, since Chinese courts have rejected two other similar lawsuits.32 e
firms pledged to compensate victims who agreed not to sue—up to $4,000 for medical
expenses and $29,500 for families that lost a child.33 Most accepted the funds, though a
group of 550 parents signed a petition to the Health Ministry demanding longer terms
of treatment for their children and more research on the potential long-term effects
of melamine contamination.34 One man who attempted to hold a news conference to
ask for greater compensation was detained by police.35 Facing enormous debts due to
compensation claims from thousands of victims of the contaminated milk, Sanlu filed
for bankruptcy in December 2008.36 A Beijing dairy company, not implicated in the
melamine scandal, later purchased Sanlu for $90 million.37
Crisis ConTrol?
Although early warnings of a problem in the milk industry went unheeded and then
were downplayed in the interest of the Olympics, immediately after the scandal broke
in September, the Chinese leadership took action. President Hu Jintao visited a dairy
production center in Anhui province and called for diligence about food safety, while
Prime Minister Wen Jiabao apologized for the scandal on national television and claimed
that the government would do everything possible to resolve food safety issues within
the next two years.38
Of Milk and Spacemen: e Paradox of Chinese Power in an Era of Risk
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e State Council convened a leading group, including officials from the Health
Ministry, the quality control agency, and local government officials. ey launched a
national investigation of milk products and informed the World Health Organization.39
e quality control agency eliminated all inspection exemptions for food producers. Li
Changjiang, the director of this agency, resigned on 21 September and was replaced by
Wang Yong, a former Deputy Secretary General of the State Council, who reportedly
is close to Vice Premier Li Keqiang. More than 36 party and local officials were fired in
Shijiazhuang, including Sanlu chairwoman Tian Wenhua and a State Council report
reprimanded Sanlu for lying.40
e State Council then tightened milk quality standards, limiting melamine to
1mg per kg for infant formula and 2.5 mg per kg of other dairy products, the current
standard in the United States.41 ese amounts are allowed because melamine may be
contained in the plastic packaging used in food containers. Criticizing dairy production
as “chaotic,” the State Council called for an overhaul of the industry in the wake of the
melamine crisis, which had tarnished the reputation of the food sector as a whole.42
Hospitals were urged to provide free checkups to affected children, and provincial
authorities were instructed to set up hotlines to provide information to citizens. e
Standing Committee of the National Peoples Congress held an emergency session to
pass a draft law on food safety. On 19 November, the Chinese government announced
a new initiative to overhaul the dairy industry by introducing new safety standards for
milk and animal feed.43
Despite all of these actions, old habits quickly returned. Within a few days of the
scandal breaking, the Communist Party Propaganda department reportedly instructed
news outlets to stick to the official line and limit their coverage of the melamine scan-
dal.44 As preparations for the spacewalk began, the media shifted their reporting to
the space story.
e September 2008 melamine scandal is but one in a series of food and product
safety crises in China in recent years.45 In April 2004, several months after Chinese
health officials had pledged to improve transparency and accountability in the aftermath
of the SARS crisis, 12 babies died and hundreds of others suffered serious symptoms of
malnutrition in Anhui province after consuming substandard milk powder marketed
falsely under major name brands, including Sanlu. As in the 2008 melamine scandal,
complaints about milk powder began to trickle in months before action was taken.
Melamine supposedly was banned from food and feed in China in 2007 after
melamine-tainted wheat gluten in pet food poisoned cats and dogs in the United States,
but a year later Chinese media reported that the substance continued to be used in
animal feed and was still openly sold and advertised as “crystallized protein.46 In March
2008, a Guangdong factory was shut down briefly due to bacterial contamination, and
     
E W
216
during that same month the United States attributed 81 deaths to Chinese production
of substandard heparin, a blood-thinning drug made from pig intestines. In February
2009, seventy Guangzhou residents became ill after eating pork containing a banned
performance-enhancing drug, clenbuterol, likely added to the meat to give it a leaner
appearance.47
In recent years, as a December 2007 State Council White Paper on Food Safety
documented, the Chinese government has made a concerted effort to demonstrate that it
was addressing its food safety problems, by, for example, reorganizing its State Food and
Drug Administration (SFDA) as an independent agency, modeled on the United States
FDA.48 Nonetheless, the Chinese agency
proved inept due to bureaucratic infighting
with agencies with related portfolios, such as
the Ministries of Health and Agriculture, and
was plagued by endemic corruption. Vested
interests in localities have also stymied efforts
at improving food and drug regulation, which
they saw as potentially restricting local employment and, accordingly, reducing local
government revenue.49 e SFDA’s founding director, Zheng Xiaoyu, was executed in
2007 for taking bribes from pharmaceutical companies and dereliction of duty. Just
a week before the 2008 melamine scandal broke, the SFDA was reintegrated into the
Ministry of Health.
On 28 February 2009, China’s legislature finally passed a new food safety law,
which will take effect on 1 June.50 e legislation had been under discussion for several
years and received more than 11,000 comments. In an effort to improve supervision
of food safety, the law creates a new commission under the State Council that will
monitor food safety information, evaluate food safety risks and warnings, and provide
information on major accidents. e law also increases penalties for food safety viola-
tions and bans additives that are not proven to be safe. New national standards will
be established for food quality, food additives, and acceptable levels of contaminants.
While an improvement over past practices, questions remain about how effectively
the new legislation will be enforced because it provides few details about resources,
timelines, and benchmarks for implementation.51 In its press release announcing the
new law, even the Ministry of Health acknowledged that “Chinas food safety situation
remains grim, with high risks and contradictions,” and requires continuing efforts at
supervision.52
Although the law seeks to improve coordination on food safety issues by grant-
ing the Ministry of Health a leading role, bureaucratic impediments are likely to
remain a major challenge considering that four other national agencies (including the
Low profit margins, widespread
counterfeiting, inadequately trained
auditors, and corrupt management all
reinforce a culture of inattention to
product (as well as workplace) safety.
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217
Ministry of Industry and Information Technology, the Ministry of Agriculture, the
State Administration for Industry and Commerce, and the General Administration of
Quality Supervision), as well as their local government offices, will continue to share
responsibilities. Interestingly, the law calls on social organizations and the media to
help focus attention on food safety and urges prompt reporting of violations of the law,
though it remains unclear how this will happen in the absence of a free press, NGOs
committed to food safety, and a judicial system that is responsive to liability claims
from private citizens.53
globalizaTion and Food saFeTy risk
As a series of product and food safety scandals have unfolded in China in the past few
years, Americans have been very surprised to find out that the quality of their name-
brand medicines and food products depends on the safety practices of often unregu-
lated Chinese farmers and producers. Since Chinese milk powder is an ingredient in
an increasingly global food supply chain, the 2008 melamine crisis led major brands
such as Cadbury, Lipton, Kraft, and Mars to recall contaminated candy, cookies, and
beverages in certain markets.
Because economic and technological decisions in a globalized economy have un-
foreseen but potentially wide-ranging transnational consequences, the German sociolo-
gist Ulrick Beck has characterized the current era as a world risk society. He called food
safety crises textbook cases of risk in that they feature unclear consequences for public
health due to uncertainties of transmission and the ease with which crises can spill over
national boundaries. Moreover, food safety crises involve multiple policy areas—public
health, trade, agriculture, and foreign policy. In Beck’s view, such crises will lead to
societal counter-pressure to address underlying problems.54 In China, however, efforts
by the media and consumers to call attention to problems with the milk proved a poor
match for the mutually supporting efforts by central government propagandists, dairy
industry executives, and their local political supporters to suppress negative coverage
of food safety during the Olympics.
Moreover, low profit margins, widespread counterfeiting, inadequately trained
auditors, and corrupt management all reinforce a culture of inattention to product (as
well as workplace) safety.55 As a result, the decision by unscrupulous and inadequately
regulated Chinese milk producers to boost their profits by masking their low-quality
milk with melamine created health risks for millions of consumers worldwide. Chinese
parents rushed their children to the hospitals for medical tests, major firms recalled
products with Chinese-made dairy ingredients, and food safety once again became a
topic for diplomacy with China. e challenge for the United States and other mem-
     
E W
218
bers of global society is how to manage the risk from Chinas food safety practices and
weak governance.
China has been working with international organizations such as the World
Health Organization (WHO), the Food and Agriculture Organization (FAO), and
the World Trade Organization (WTO) to address global food safety concerns in the
wake of the 2008 melamine crisis, though the Chinese government at times has reacted
defensively. After it was originally reported on 9 October that a Chinese official told a
WTO Committee on Sanitary and Phytosanitary Measures that the melamine intro-
duced in milk products was an accident, the Chinese delegation later claimed to have
been misquoted in discussing the “incident.” Chinese officials urged WTO members
to base their countermeasures on science, risk assessment, and WHO guidance, “to
avoid escalating the restrictions.56
Problems with food safety in the United States only encourage Chinese officials to
engage in tit-for-tat exchanges on food safety.57 e United States has attracted its own
share of criticism over its use of genetically modified foods, its standards for certifying
beef free of mad cow disease (witness massive protests in South Korea in June 2008
against its imports of U.S. beef), and even a finding of trace elements of melamine in
two leading brands of infant formula this fall.
Domestically, the 2009 scandal over salmonella contamination in products made
by the Peanut Corporation of America, infecting 666 people and possibly contribut-
ing to 9 deaths,58 showed that U.S. domestic food safety oversight also has significant
shortcomings that need to be addressed. In response to growing concern among the
public and members of Congress, in March 2009, President Barack Obama created a
Food Safety Working Group to improve regulation, coordination, and oversight.59
Where the United States differs fundamentally from China however, is in the
strength and number of consumer groups focusing on food safety, the role of industry
associations in promoting best practices, the availability of unimpeded media cover-
age of problems with the food supply, the accountability of the American political and
legal system, and the availability of legal remedies for victims of tainted products.60
Nonetheless, it will be all the more important for the United States to get its own food
protection framework both for the benefit of American consumers and for greater
leverage in discussions with China on the issue.
The Challenge oF risk ManageMenT
Although U.S. exports of food products to China are much greater than Chinese im-
ports to the United States, Chinese products are increasingly appearing in American
stores. China is now the third largest source of agricultural and seafood imports to
Of Milk and Spacemen: e Paradox of Chinese Power in an Era of Risk
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2009
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219
the United States, after Canada and Mexico. Dairy products, though, make up only
a small proportion of Chinese imports and mostly involve ingredients derived from
milk, such as casein substances, which are used in coffee creamers, sports drinks, and
power bars.
e Food and Drug Administration (FDA) is responsible for monitoring 80 per-
cent of U.S. food imports, although just 1 percent is inspected.61 According to a June
2008 study by the U.S. General Accountability Office (GAO), from 2001 to 2007,
just 33 Chinese food producers
were inspected in that time period,
out of a total of 1,034 inspections
worldwide.62 Expanding the num-
ber of inspections would be very costly. e FDA estimates that more than $3 billion
(approximately $16,700 per inspection) would be necessary for the agency to inspect
the 189,900 overseas facilities that produce and process foods destined for the U.S.
market.63 is would far exceed the agency’s budget of $620 million for food protec-
tion in FY2008.
On 13 November 2008, the FDA took action to halt all imports of Chinese
products containing milk, pending documentation certifying that they are free from
melamine contamination.64 e FDA has the right to refuse foreign shipments of foods
that violate American safety standards. In the Chinese case, the refusal rate for FY2006
was just 0.15 percent. Seafood products constituted half of the 700 shipments refused
during that time period. e relatively low refusal rate has enabled Chinese authori-
ties to claim that 99 percent of their products are safe, though this does not take into
account the extremely small proportion of inspected goods.65
Congressional oversight committees and the GAO have been critical of the FDA’s
performance domestically and overseas. In response to such criticism, the FDA issued
a food protection plan in December 2008 to improve food safety and food defense.66
As a part of this effort, the FDA opened three new offices in China staffed by thirteen
employees. e agency is also exploring a program to allow accredited third parties to
certify food safety on a voluntary basis. Adding staff on the ground and introducing
voluntary inspections will help, but the scale of the challenge in China is great, consid-
ering that the country has more than 400,000 food-producing companies (compared
to 150,000 in the US), only two-thirds of which are officially registered.
For importers who seek low-priced Chinese food products, a more intrusive in-
spection system would increase safety but also raise costs. After pesticides were found
in frozen spinach exported to Japan in 2002, for example, China and Japan agreed to
specify 27 firms to be used for this export and a stringent inspection regime, all of which
have increased the cost of the export, which has yet to return to its pre-2002 volume.67
Problems with food safety in the United States
only encourage Chinese officials to engage
in tit-for-tat exchanges on food safety.
     
E W
220
Consumers in the United States, though much better-informed and organized than
Chinese citizens, have little opportunity to balance safety with price, since the 2008
U.S. Farm Bill only requires country of origin labeling for meat, seafood, produce,
ginseng, and certain nuts.
Recent food safety crises have created momentum for U.S.-China bilateral coop-
eration in food safety.68 Dialogue on food safety has proceeded through the Strategic
Economic Dialogue framework, as well as through bilateral initiatives by the FDA and
the Department of Agriculture.
According to a memorandum of understanding signed between China and the
United States on 11 December 2007, Chinese companies that export products with
a high refusal rate (seafood, wheat gluten, rice protein, low-acid canned goods, and
pet foods) must register with the Chinese quality control agency and undergo annual
inspections. While a promising start, only a limited number of products are covered and
implementation depends on the Chinese central government’s ability to achieve local
compliance with regulations, an especially weak link in Chinas food safety chain.
Ironically, it is China’s weakness, and not its strength, that will pose the greater
challenge to other countries. While Chinas emergence as a space power is of increas-
ing concern to American military planners, the United States is better able to address
this issue than it is to address Chinese food safety risk. A leader in space, the United
States must renew its own commitment to exploration and space technology in order
to maintain its edge. e Obama Administration will also need to develop a compre-
hensive response to China’s growing capabilities, involving a mixture of deterrence
and diplomacy.69
To manage the increasing food safety risk stemming from a globalized supply
chain, however, the United States will have to manage much less straightforward gov-
ernance issues both at home and in China. is will involve reexamining American
food safety practices from the farm to the table, committing significant new resources
to import controls, and providing greater technical aid to China to bolster its food
safety governance, especially at the local level.
noTes
1. Chang Ai-Ling, “Commentary: Shenzhou-7 Set Standard for China-Made Products,” Xinhua, 28
September 2008, http://news.xinhuanet.com.
2. Mark Magnier, “Infant Milk Powder Is Latest Worry in China,” Los Angeles Times, 13 September
2008, A7.
3. Aleda V. Roth, Anday A. Tsay, Madeleine Pullman, and John V. Gray, “Unraveling the Food Supply
Chain: Strategic Insights from China and the 2007 Recalls,Journal of Supply Chain Management 44, no.
1 (January 2008): 28-34.
4. Elizabeth C. Economy and Adam Segal, “China’s Olympic Nightmare: What the Games Mean for
Beijing’s Future,Foreign Affairs 87, no. 4 (July/August 2008): 47.
A
W
Of Milk and Spacemen: e Paradox of Chinese Power in an Era of Risk
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2009
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5. Joan Johnson-Freese, “Space Wei Qi: e Launch of Shenzhou V,” Naval War College Review 57, no.
2 (Spring 2004): 123.
6. Johnson-Freese, 127; Kevin Pollpeter, Building for the Future: China’s Progress in Space Technology
during the Tenth Five-Year Plan and the U.S. Response (Carlisle, PA: Strategic Studies Institute, March
2008), 28-30; John A. Lewis, “Surmounting the Peak: China’s Space Program,” Paper Presented to the
52nd Annual Meeting of the American Astronautical Society, 16 November 2005, 4.
7. Ashley J. Tellis, “China’s Space Capabilities and their Impact on U.S. National Security,” testimony be-
fore the U.S.-China Economic and Security Review Commission, Washington, D.C., 20 May 2008, 3.
8. “Feitian EVA Spacesuit,Sino-Defence.com, 7 November 2008, http://www.sinodefence.com/space/
spacecraft/spacesuit.asp.
9. Office of the Secretary of Defense, Annual Report to Congress: Military Power of the People’s Republic
of China 2008 (Washington, D.C.: U.S. Department of Defense, 2008), 3, 19.
10. Ibid., 19. For a debate on the implications of the Chinese ASAT test, see Ashley J. Tellis, “China’s
Military Space Strategy,Survival 49, no. 3 (2007) 41-72; and Michael Krepon, “China’s Military Space
Strategy: An Exchange,Survival 50, no. 1 (2008): 157-198.
11. For example, Peter J. Brown, “China Gets a Jump on US in Space,Asia Times Online, 25 October
2008, www.atimes.com.
12. Economist Intelligence Unit, “Got Real Milk?,” Business China XXXIV, no. 18 (29 September
2008): 1.
13. “China Starts Probe into Milk Powder after One Baby Dies,Xinhua, 11 September 2008, http://
news.xinhuanet.com.
14. Vivian Wu, “78 Questioned over Melamine-Tainted Baby Milk,” South China Morning Post,
http://www.scmp.com.
15. He Huifeng, “Investigative TV Report Praised Sanlu,” South China Morning Post, 14 September
2008, www.scmp.com.
16. Tracy Quek, “More Babies Found to have Kidney Stones; Fake Milk Powder Scare Uncovered in
Six Provinces,e Straits Times, 12 September 2008, http://www.straitstimes.com.
17. He Huifeng, “Panic Spreads As More Fall Ill in Milk Powder Scandal,South China Morning Post.
14 September 2008, http://www.scmp.com.
18. Vivian Wu, “Sanlu Lobbied Officials to Cover up Milk Scandal,” South China Morning Post, 2
October 2008, http://www.scmp.com.
19. “More Babies across China Suffer from Kidney Stones, Fake Milk Powder Suspected,Xinhua, 11
September 2008, http://news.xinhuanet.com.
20. Josephine Ma, “Complaints Were Received in June but Nothing was Done,South China Morning
Post, 13 September 2008, http://www.scmp.com.
21. “Chinese Press Controls: Eating their Words,e Economist, 25 October 2008, 52.
22. Chinese Communist Party officials issued directives to journalists specifically placing food safety
issues off limits during the Olympics. See Congressional-Executive Commission on the PRC, 2008 Report
to Congress, 59, http://www.cecc.gov.
23. Melinda Liu, “Saving Face Goes Sour,Newsweek, 6 October 2008, www.newsweek.com.
24. Andrew Janes, “Delay Frustrates Fonterra Boss; Second Baby Dies from Contaminated Formula,
e Dominion Post (New Zealand), 16 September 2008, http://www.stuff.co.nz/dominionpost/.
25. Dan Eaton, “Fonterra Bungled Crisis, Says Clark; Countdown to a Crisis,e Press (New Zealand),
23 September 2008, http://www.thepress.co.nz.
26. Liu.
27. “Fonterra Apologizes after ‘Incredibly Painful Lesson’,e Press (New Zealand), 25 September
2008, http://www.thepress.co.nz.
28. Andrew Janes, “Fonterra Pays $8 Million to Charity,” e Press (New Zealand), 11 October 2008,
http://www.thepress.co.nz.
29. “Six Infants Possibly Died of Tainted Milk Powder,Xinhua, 1 December 2008, http://www.
chinadaily.com.cn.
30. Peh Shing Huei, “Milk Scandal: Parents Seek Better Deals; ey Want More Compensation; China
     
E W
222
Netizens Slam Verdicts as Favouring the Rich and Powerful,” Straits Times, 24 January 2009, http://www.
straitstimes.com.
31. David Barboza, “Former Executive Pleads Guilty in China Milk Scandal,New York Times, 1 Janu-
ary 2009, A10.
32. Edward Wong, “Class-Action Suit, Rare in China, Is Filed over Tainted Milk,” New York Times,
21 January 2009, A19.
33. Edward Wong, “Milk Scandal in China Yields Cash for Parents,” New York Times, 17 January
2009, A10.
34. Huei, “Milk Scandal: Parents Seek Better Deals; ey Want More Compensation; China Netizens
Slam Verdicts as Favouring the Rich and Powerful.”
35. Associated Press, “China Father in Milk Case Detained,” New York Times, 3 January 2009, A6.
36. “Chinese Milk Firm Faces Huge Debts,Xinhua, 25 December 2008, http://www.china.org.cn/busi-
ness/2008-12/25/content_17008635.htm.
37. “Sanyuan Buys Scandal-Hit Sanlu Dairy Company at Auction,” Xinhua, 4 March 2009, http://
www.gov.cn.
38. Zhang Pinghui and Stephen Chen, “Wen Pledges to Restore Confidence in Food Safety within Two
Years,” South China Morning Post, 1 November 2008, www.scmp.com; Raymond Li, “Hu Urges Dairy
Industry Vigilance on Symbolic Visit,South China Morning Post, 1 October 2008, A6.
39. China Starts Emergency Response over Tainted Milk Powder Incident,Xinhua, 13 September 2008,
http://news.xinhuanet.com. On 22 October 2008, the United Nations in China released an occasional
paper, Advancing Food Safety in China, http://www.un.org.cn. e WHO issued its own assessment of
the 2008 melamine scandal in “Melamine Contamination Event, China, September-October 2008,” 4
December 2008, http://www.who.int.
40. Josephine Ma, “Watchdog Boss Takes the Blame: Milk Scandal Fells Product Safety Chief,South
China Morning Post, 23 September 2008, 1.
41. Edward Wong, “Milk Scandal Pushes China to Set Limits on Melamine,” New York Times, 9 October
2008, A10; U.S. Food and Drug Administration, “Interim Safety and Risk Assessment of Melamine and
Its Analogues in Food for Humans; Availability,” 13 November 2008, http://www.fda.gov.
42. “‘Urgent’: China’s Cabinet Lays Groundwork for Dairy Industry Recovery,Xinhua, 6 October
2008, http://news.xinhuanet.com.
43. Andrew Jacobs, “China Issues Broad Rules to Improve Dairy Safety; Edicts Cover Industry from
Breeding to Sales,International Herald Tribune, 21 November 2008, http://www.iht.com.
44. Raymond Li, “Censorship Hammer comes down over Scandal,” South China Morning Post, 16
September 2008, http://www.scmp.com.
45. Congressional-Executive Commission on China, 2007 Annual Report to Congress, 168-179, http://
www.cecc.gov.
46. You Nuo, “Opinion: Citizens Should Help to Protect Food Safety, China Daily, 22 November
2008, http://www.chinadaily.com.cn.
47. Michael Wines, “Pig Organs Tainted with a Banned Steroid Sicken 70 in China,” e New York
Times, 24 February 2009, A8.
48. “Full Text: White Paper on Food Quality and Safety,Xinhua, 17 August 2007, http://www.
chinadaily.com.cn.
49. Waikeung Tam and Dali Yang, “Food Safety and the Development of Regulatory Institutions in
China,” Asian Perspective 29, no. 4 (2005): 13-19.
50. Chinese People’s Congress, “Zhonguo Renmin Gongheguo Shipin Fa” [PRC Food Safety Law], 28
February 2009, http://www.SinoLaws.com; “China Adopts Law to Strengthen Food Safety Control, Vows
to Punish Offenders,Xinhua, 28 February 28 2009, http://www.xinhuanet.com.
51. Steven Dickinson, “Food Fumble: China Cant Regulate Away Its Safety Problems,” e Wall Street
Journal, 3 March 2009.
52. “New Law Fights ‘Grim’ Situation in Food Safety,Shanghai Daily, 3 March 2009.
53. Dickinson; Review-Editorial, “Food Safety: China Acts but Should Do More,” e Straits Times,
5 March 2009.
Of Milk and Spacemen: e Paradox of Chinese Power in an Era of Risk
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223
54. Ulrich Beck, World Risk Society (Cambridge: Polity, 1999), 48-49.
55. Alexandra Harney, e China Price: e True Cost of Chinese Competitive Advantage (New York:
e Penguin Pess, 2008), 208-9; Chris Ansell, “Holding China Accountable? Protecting Consumers in
Global Markets,” (unpublished paper prepared for the 8th Annual Travers Conference on Ethics and Ac-
countability in Government, 10 October 2008, University of California, Berkeley), 9, http://www.polisci.
berkeley.edu/travers/articles.asp.
56. World Trade Organization, “Sanitary and Phytosanitary Measures: ink Development? ink
Fruit-Fly Committee Hears,” 8-9 October 2008, http://www.wto.com.
57. For example, “China Requesting More Information on Melamine-Contaminated U.S. Infant
Formula,Xinhua, 29 November 2008, http://www.xinhuanet.com.
58. Center for Disease Control, U.S. Department of Health and Human Services, “Investigation
Update: Outbreak of Salmonella Typhimurium,” 24 February 2009, http://www.cdc.gov/salmonella/ty-
phimurium/update.html.
59. Gardiner Harris, “President Plans Team to Overhaul Food Safety,New York Times, 15 March
2009, 20.
60. Drew ompson and Hu Ying, “Food Safety in China: New Strategies,” Global Health Governance
1, no. 2 (Fall 2007): 6, http://www.ghgj.org. Richard Suttmeier argues that China lacks reliable societal
“searchlights,” i.e., institutions that regularly call attention to regulatory lapses. See Richard P. Suttmeier,
“e ‘Sixth Modernization’? China, Safety, and the Management of Risks,” Asia Policy, no. 6 (July 2008)
143.
61. e Department of Agriculture is responsible for monitoring the remaining 20 percent of food
imports, focusing on meats, poultry, and eggs.
62. United States Government Accountability Office, “Federal Oversight of Food Safety,” Testimony
before the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House
of Representatives, 12 June 2008, Appendix 1, 1.
63. Ibid., 8.
64. Gardiner Harris and Andrew Martin, “U.S. Blocks Products with Milk from China,” New York
Times, 14 November 2008, A18.
65. Geoffrey S. Becker, Food and Agricultural Imports from China: Congressional Research Service Report
for Congress RL34080, 26 September 2008, 11.
66. U.S. Food and Drug Administration, “Food Protection Plan: One-Year Progress Summary,” De-
cember 2008, http://www.fda.gov.
67. Linda Calvin, Fred Gale, Dinghuan Hu, and Bryan Lohmar, “Food Safety Improvements Underway
in China,” Amber Waves (November 2006): 16-21, http://www.ers.usda.gov.
68. Linden J. Ellis and Jennifer L. Turner, Sowing the Seeds: Opportunities for U.S.-China Cooperation
on Food Safety (Washington, D.C.: Woodrow Wilson International Center for Scholars, September 2008),
10-12, http://www.wilsoncenter.org/index.cfm?topic_id=1421&fuseaction=topics.publications&group_
id=476235.
69. Bruce W. MacDonald, Special Report Number 38: China, Space Weapons, and U.S. Security, (Council
on Foreign Relations, September 2008), 33-34.
... With the increasingly global food supply chain, the melamine scandal led major brands like Cadbury, Lipton, Kraft, and Mars to recall contaminated candy and cookies in certain markets. The current era is a "world-risk" food chain, since food safety crises feature unclear consequences for public health because of uncertainties of transmission as well as their ease to spill over national boundaries (Wishnick, 2009). With globalization, goods and products can flow freely between regions, and countries. ...
... Food safety is an important issue that remains unresolved in both the developed and developing countries (Dellios, Yang and Yilmaz, 2009 focusing on food safety, the role of industry associations in promoting best practices, the unimpeded media coverage of problems with the food supply, and a legal system that is more responsive to these types of events (Wishnick, 2009). ...
... The following section argues that epidemics are more aptly conceptualized as risks and notes that the practices that each state will adopt in response are derived from its 'governmentality' or approach to government. After experiencing a series of national emergencies ( SARS crisis, 2008 Sichuan earthquake), scholars inside and outside China turned to the sociological concept of risk to capture the non-traditional security challenges that emerge from the modernization process itself (Suttmeier 2009;Wishnick 2009a;Wishnick 2009b;Zhong and Zhong 2010), and began discussing the importance of public administration and risk management in disaster response (Wang and Yu 2010). For the Chinese government, managing risk requires hard choices, as the very development process that creates risks for society is viewed as a priority for state security. ...
Article
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Chapter
This chapter explores the performance implications of product recalls, emphasizing legal, non-financial, and financial consequences. It discusses the financial burden of recalls, including direct costs such as reimbursement and indirect costs such as loss of trust. Legal implications are detailed, covering contractual, civil, regulatory, and criminal liabilities. Non-financial effects are examined, focusing on their impact on customer satisfaction and brand perception. The chapter suggests strategies for managing customer expectations and reputation during recalls. Financial performance implications are outlined, highlighting the potential negative impact on firm value, sales, and market shares, and offering insights into investor responses. Overall, this chapter provides a comprehensive understanding of the multifaceted impact of product recalls on a company’s performance and offers strategies to mitigate these effects.
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Wei Qi is the favorite Chinese board game chess with more than two hundred pieces rather than sixteen, allowing for significantly increased strategic complexity. When Lieutenant Colonel Yang Liwei lifted off into space from China's Jiuquan launch site just after 9 am on 15 October 2003, returning twenty-one hours later after sixteen orbits around the earth China made a significant geostrategic Wei Qi move. China views long-term geostrategic politics as having about the same number of possible permutations as a Wei Qi board, and it is posturing accordingly. The Shenztioti V launch was part of that posturing. Perched atop a Long March (CZ-2F) launcher, the Shenztioti V spacecraft took China's first taikonaut on a trip thoroughly rehearsed during four unmanned precursor missions. Within China, a publicity campaign was carefully crafted to bring interest and national pride to a peak at the time of the event. Worldwide, media attention was considerable. Prelaunch speculation about the implications of the Chinese manned space program ranged from dubbing it a stunt to speculation about a new space race, to angst over its potential military significance.
China’s Olympic Nightmare: What the Games Mean for Beijing’s Future A W rOf Milk and Spacemen: The Paradox of Chinese Power in an Era of Risk Spring/Summer 2009 • volume xv
  • C Elizabeth
  • Adam Economy
  • Segal
Elizabeth C. Economy and Adam Segal, “China’s Olympic Nightmare: What the Games Mean for Beijing’s Future,” Foreign Affairs 87, no. 4 (July/August 2008): 47. A W rOf Milk and Spacemen: The Paradox of Chinese Power in an Era of Risk Spring/Summer 2009 • volume xv, issue ii 221
Infant Milk Powder Is Latest Worry in China
  • Mark Magnier
Mark Magnier, "Infant Milk Powder Is Latest Worry in China," Los Angeles Times, 13 September 2008, A7.
For a debate on the implications of the Chinese ASAT test, see Ashley J. Tellis, “China’s Military Space StrategyChina’s Military Space Strategy: An Exchange
  • Ibid
Ibid., 19. For a debate on the implications of the Chinese ASAT test, see Ashley J. Tellis, “China’s Military Space Strategy,” Survival 49, no. 3 (2007) 41-72; and Michael Krepon, “China’s Military Space Strategy: An Exchange,” Survival 50, no. 1 (2008): 157-198.
China Gets a Jump on US in Space
  • For
  • Example
  • J Peter
  • Brown
For example, Peter J. Brown, “China Gets a Jump on US in Space,” Asia Times Online, 25 October 2008, www.atimes.com.
South China Morning Post Chinese Press Controls: Eating their Words The Economist Chinese Communist Party officials issued directives to journalists specifically placing food safety issues off limits during the Olympics. See Congressional-Executive Commission on the PRC Saving Face Goes Sour
  • Josephine Ma
Josephine Ma, " Complaints Were Received in June but Nothing was Done, " South China Morning Post, 13 September 2008, http://www.scmp.com. 21. " Chinese Press Controls: Eating their Words, " The Economist, 25 October 2008, 52. 22. Chinese Communist Party officials issued directives to journalists specifically placing food safety issues off limits during the Olympics. See Congressional-Executive Commission on the PRC, 2008 Report to Congress, 59, http://www.cecc.gov. 23. Melinda Liu, " Saving Face Goes Sour, " Newsweek, 6 October 2008, www.newsweek.com.