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Red Christmas

As you go about your Christmas shopping this season, odds are you'll find three little words on almost every package: "Made in China." For those of us who believe in free trade and free markets, there is nothing wrong with the tidal wave of Chinese goods flooding into America - unless those goods cause harm or injury. Regrettably, that's exactly what has happened over the past few years, as China's world-class economy and Third-World quality standards have conspired to churn out products that endanger American lives.

 

DEADLY IMPORTS. The cases range from poisoned pet food and contaminated hog feed to toxic toothpaste and defective tires. But the best-known cases involve lead-tainted toys. Some 20 million toys manufactured in China were recalled in 2007, after it was discovered they contained high levels of lead. Mattel recalled 9 million toys, including Barbie dolls and merchandise for the animated movie "Cars," when the company learned that the toys included lead paint and faulty magnets that were prone to fall off.

According to a Pittsburgh Tribune-Review report, 7.3 million Polly Pocket dolls were recalled due to shoddy construction, along with 967,000 Fisher-Price toys, 250,000 SpongeBob SquarePants address books, and 1.5 million Thomas & Friends Railway toys - all due to unacceptable lead levels.

Just how high is "unacceptable"? The Consumer Product Safety Commission (CPSC) sets the acceptable level of lead at 600 parts per million (ppm). In 2007, scientists found lead levels between 2,700 ppm and 39,000 ppm in Halloween-related items made in China. Investigators even discovered Halloween toys filled with kerosene.

Tainted toys are more than just an annoyance. Lead poisoning is a serious health issue, especially for children younger than 3. Specifically, it can hinder development of the brain and nervous system, leading to higher rates of behavioral problems and lower intelligence levels, says Dr. Dana Best of the American Academy of Pediatrics.

Since 2003, according to an Associated Press report, at least one child has died and 19 have undergone surgery after swallowing magnets shoddily attached to Polly Pocket dolls. In another instance, this one involving toy building sets, one child died and four were badly injured after swallowing small magnets.

Yet children's toys are not the only dangerous imports from China. AP reports that at least 81 deaths and 785 "severe allergic reactions" have been traced to contaminated heparin "made from ingredients imported from China." It appears that a Chinese plant was cutting corners to save money on the anti-clotting drug, using what The Baltimore Sun calls a "chemical modified to look like heparin's main ingredient."

In the understated words of Robert Parkinson, president of drug manufacturer Baxter International, "The complexity of the global drug supply chain creates new and emerging risks that call for new ways of thinking about, identifying and addressing vulnerabilities."

Those vulnerabilities are growing. There are already 3,300 overseas pharmaceutical plants producing drugs for U.S. consumption. In 2007, the FDA received 500 applications to produce generic drugs from Chinese firms and just 150 from U.S.-based companies.

The list of deadly Chinese imports includes contaminated feed eaten by about 6,000 hogs, 60 million units of pet food with poisonous melamine that had to be recalled (no one really knows how many pets died), and 450,000 defective tires.

Cheaper Goods. There's an old saying: "It's better to fix the problem than to fix the blame." But sometimes fixing the problem requires us to identify who's to blame. Arguably, the lethal problem of tainted Chinese imports has two causes: America's insatiable appetite for ever-cheaper goods and China's cold focus on revenue rather than consumers.

Americans are quintessential consumers and, thanks to Madison Avenue, we are continually pumped with the motivation to keep consuming. But we want to get the most for our money. And that's where those three little words - Made in China - come into play. Factories in China churn out goods for Americans more cheaply than U.S. factories. This helps to explain why the United States imported $321 billion in Chinese goods in 2007, why 80 percent of the toys Americans buy are imported from China, and why the U.S. trade deficit with China has swelled from $49 billion to $256 billion over the past decade.

Americans helped create this global marketplace, and we have benefited from it in many ways. The increasingly interconnected economies of the United States and China are lowering labor costs, saving us money and making both sides of the Pacific richer. For instance, with exports to the United States growing by some 1,600 percent since the early 1990s, China's economy has expanded by almost 10 percent annually for a quarter-century, enabling the People's Republic to move 300 million of its subjects out of poverty.

Likewise, "American economists estimate that the U.S. is as much as $70 billion richer each year because of its relationship with China," according to the Discovery Channel miniseries "People's Republic of Capitalism." For example, the report points to Apple's iPod, designed in the United States and assembled in China. At $299 per unit, each iPod nets Apple an $80 profit and the Chinese assembly plant a $4 profit.

 

BETTER INSPECTIONS. As we are learning, this high-volume, high- speed and high-profit economic relationship with China also presents challenges and risks. Congressional documents indicate that U.S. imports have quadrupled since the CPSC was created in 1974, even as the CPSC's staff shrank to 400, "fewer than half the number of staff when the agency was established." Likewise, the number of full-time FDA employees conducting inspections on food imports decreased from 2003 to 2007, although imported food accounts for a hefty 13 percent of the average American's diet. In fact, Americans are importing $65 billion in food products each year, nearly double the value of food imports in 1994.

Of course, blaming U.S. screening and inspection systems for defective and even deadly imports is akin to blaming the security guard for a bank robbery. The factories producing these goods bear the primary responsibility, and they are located in China.

As Sen. Bill Nelson, D-Fla., said, "We were letting the Chinese industry police itself, and it wasn't doing it, and the government of China wasn't doing the inspecting." In other words, a system focused solely on production and profit, and unconcerned about safety and standards, has to be policed by someone. Toward that end, the Bush administration proposed basing inspectors overseas, a practice that would parallel the successful Container Security Initiative, which deploys U.S. Customs officials to the world's busiest ports to screen containers bound for the United States.

In addition, Congress is beefing up the CPSC and other government watchdogs. For example, the Consumer Product Safety Modernization Act, which became law last summer, increases the number of CPSC employees by 500, adds dozens of additional "overseas production facility inspectors" and boosts the agency's budget by 27 percent. As the Congressional Research Service reports, the new law also:

 

  • Requires third-party testing and certification of products used by children;
  • Treats any lead-tainted product made for children ages 7 or younger as a banned hazardous substance;
  • Lowers the lead threshold at which paint becomes a banned hazardous product;
  • Establishes a database of violations of consumer product safety rules; and,
  • Bans importation of toys manufactured by companies with persistent patterns of product hazards or public risk/injury.

 

In an interview with The Wall Street Journal, Nancy Nord, acting chair of the CPSC, described implementation of the new law as "challenging." It pays to recall that the commission is responsible for some 15,000 products.

Janet Woodcock, head of the FDA's Center for Drug Evaluation, has called for $225 million in new funding to bring foreign drug inspection facilities up to the level of U.S.-based facilities. That would be 20 times more than current funding for foreign drug inspection.

In addition, U.S. companies are taking steps to ensure safer imports. Mattel has promised to start testing Chinese-made toys in its own laboratories or in Mattel-certified labs. As The Wall Street Journal reports, Toys R Us is requiring its suppliers to "meet stricter lead standards" and date-code items before shipping.

But even as U.S. agencies and companies strengthen the screening process, America should not absolve Beijing of responsibility. Minxin Pei, director of the China Program at the Carnegie Endowment for International Peace, says that "an incestuous relationship between the state and major industries" exists in China. Beijing should not be allowed to feign ignorance or claim it is powerless to enforce safety standards on exports.

Bending to U.S. pressure, the Chinese government promised in 2007 to prohibit manufacturers from using lead in U.S.-bound toys. Chinese authorities also shut down companies that had been using lead-based paint on Mattel's toys and exporting tainted pet-food ingredients.

Perhaps these efforts - by government and industry at home and abroad - are having an impact. After a rough 2007, China had far fewer recalls this year; in fact, one of the larger toy recalls in 2008 involved a German company.

Of course, last September, thousands of Chinese infants were sickened and some died after ingesting tainted milk powder produced in China.

 

PRISON LABOR. Even if Chinese imports are free from poisonous materials and defective parts, another more insidious problem remains. An unknown percentage of Chinese goods are produced in the country's laogai ("reform through labor") camps. These sprawling prisons double as factories, churning out everything from Christmas lights and trees to rosaries and cheap electronics. To add further irony and insult to the injury, many laogai prisoners are sentenced simply because of their religious views. The fact that some of the stuff Americans purchase may be painted or assembled by people imprisoned for their religious beliefs should give us all pause, especially at Christmastime.

The Laogai Research Foundation (LRF) identified 1,100 labor camps in its 2005-2006 report, concluding that there are "11 prisons that produce toys for domestic and international markets." LRF founder Harry Wu, himself a laogai survivor, says, "It is very likely that some of the toys are entering the United States." Pointing to Beijing's record, he asks a haunting question: "Is it really any wonder that low-quality, harmful toys are being exported to the U.S. and into the hands of our children?"

It is true that the "Made in China" syndrome can claim successes and victims on both sides of the Pacific. The solution is not an end to trade, but an awareness of all the side effects - good and bad - of America's appetite and China's willingness to feed it at any cost.

 

Alan W. Dowd is a contributing editor for The American Legion Magazine.

 

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