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China

Hard To Swallow: A Western Recipe For Improving Food Safety In China

Analysis: The sheer volume of producers, along with arcane systems of public oversight, means tainted food scandals are a regular affair in China. Beijing would be wise to look westward for business-driven systems of reducing food safety risks.

A food stand in Beijing (hmcharg)
A food stand in Beijing (hmcharg)
Li Jun

BEIJING – Food safety has become one of China's biggest public concerns in recent years. From Ractopamine-fed pigs and tainted bread to recycled waste oil and bacteria-filled frozen food, endless food security hazards not only aggravate the already frayed nerves of Chinese consumers, but also challenge the society's moral bottom line. "What is left to eat?," we can't help asking.

China's food safety problems have very complex causes. Rapid development of both the food industry and food science, as well as technological advancements, actually increase the level of risk. Ongoing social transition makes regulation ineffective. The superimposition of these two factors multiplies the risks.

China has to this day relied mainly on administrative measures to safeguard food security, as commercial and sanitary authorities apply standards, regularly inspect enterprises, and conduct quality controls.

To ensure food safety by counting only on administrative supervision is to start out with a handicap. For instance, China has up to half a million major food producers, more than three million independent food business entities, and 200 million farmers. This doesn't even take into account the innumerable food workshops, small stands and vendors. Monitoring this galaxy of food production is clearly no easy task.

Still, food safety is also jeopardized by rampant corruption and the tendency of local governments to pursue superficial, short-term economic objectives. The serious food security issues that have come to light in recent years show that it's no longer possible to deter illegal behavior and the wrongdoing of businessmen merely by administrative regulation.

Protection by capitalism

Hence, the experiences of developed countries are particularly worth learning from. In general, in addition to government monitoring by prevention and controls, Western countries encourage consumers to safeguard their own rights. This is an even more direct and effective way to limit food safety problems.

Take the United States as an example. Although the U.S. Food and Drug Administration holds a wide range of preventive, control and inspection powers, institutional arrangements encourage consumers to inspect manufacturers and distributors. This establishes a sound and advanced product liability system. Once the food or relative services is found to be defective or otherwise causing damage, consumers are able to demand compensation through litigation or other forms of rights protection. This punitive compensation can sometimes amount to astronomical sums.

In addition, once the food safety information and complaints are gathered together, social media will be able to monitor or expose the criminal businesses in a timely manner. This will affect buyers' choices and put huge pressure on unscrupulous businesses, ultimately forcing them to pay attention to food safety. Obviously, even if the pursuit of maximum profit is the nature of "economic animals," an enterprise will care more about its food safety and quality when its products are related to its own benefits and survival. What China lacks today is precisely this mechanism for connecting food safety with economic interests.

In order to encourage and support consumers in safeguarding their rights, we must first improve the legal system, and in particular fully mobilize the enthusiasm for self-protection amongst individuals. For example, currently according to China's Food Safety Law, if a producer knowingly sells food that does not meet the regulatory standards, consumers can demand a compensation of ten times the original price. However food is a relatively cheap commodity, and a ten-fold punishment is normally not a large enough sum to prompt consumers to seek compensation. It is also quite inconvenient to bring a complaint, and to find legal settlements.

In the long term, all this encourages the food businesses to be even more reckless. Multiple mechanisms such as arbitration, mediation and neutral evaluation systems should be established so as to settle the disputes and resolve problems rapidly. And ultimately, the sums that awarded to injured parties must be worth fighting for. These are the kinds of economic incentives that will ultimately elevate the level of food security in China.

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Photo - hmcharg

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Future

Livestream Shopping Is Huge In China — Will It Fly Elsewhere?

Streaming video channels of people shopping has been booming in China, and is beginning to win over customers abroad as a cheap and cheerful way of selling products to millions of consumers glued to the screen.

A A female volunteer promotes spring tea products via on-line live streaming on a pretty mountain surrounded by tea plants.

In Beijing, selling spring tea products via on-line live streaming.

Xinhua / ZUMA
Gwendolyn Ledger

SANTIAGO — TikTok, owned by Chinese tech firm ByteDance, has spent more than $500 million to break into online retailing. The app, best known for its short, comical videos, launched TikTok Shop in August, aiming to sell Chinese products in the U.S. and compete with other Chinese firms like Shein and Temu.

Tik Tok Shop will have three sections, including a live or livestream shopping channel, allowing users to buy while watching influencers promote a product.

This choice was strategic: in the past year, live shopping has become a significant trend in online retailing both in the U.S. and Latin America. While still an evolving technology, in principle, it promises good returns and lower costs.

Chilean Carlos O'Rian Herrera, co-founder of Fira Onlive, an online sales consultancy, told América Economía that live shopping has a much higher catchment rate than standard website retailing. If traditional e-commerce has a rate of one or two purchases per 100 visits to your site, live shopping can hike the ratio to 19%.

Live shopping has thrived in China and the recent purchases of shopping platforms in some Latin American countries suggests firms are taking an interest. In the United States, live shopping generated some $20 billion in sales revenues in 2022, according to consultants McKinsey. This constituted 2% of all online sales, but the firm believes the ratio may become 20% by 2026.

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