Monday, July 16, 2007

Killing the Regulator

Published: July 16, 2007

The Chinese government’s extraordinary decision to execute its chief food and drug regulator for taking bribes and allowing the sale of tainted drugs is a perfect example of all that is wrong with China’s approach to regulation.

Beijing’s leaders — who disdain the idea of their own accountability — may think that killing the regulator is enough to reassure consumers at home and abroad that China is now ready to guarantee the safety of its products. But they’re wrong.

What China needs is an effective and transparent regulatory system and a clear understanding that its export boom will suffer if it continues to sell tainted food, toys and toothpaste. Until that happens — and there is no guarantee that it will — American regulators will have to do more to screen Chinese imports to protect American consumers.

China’s dysfunction has deep roots. The Communist Party leadership has muzzled consumer advocacy groups and the press. The government is also loath to do anything that might hinder the country’s breakneck economic growth. With no public accountability, shoddy companies are allowed to cut every possible corner in their pursuit of business, often under the protection of corrupt government officials.

The results include rivers laced with ammonia and toothpaste sweetened with an industrial solvent, as well as tainted antibiotics that have killed more than a dozen children and sickened hundreds. The good news is that for the first time China’s leaders are talking about the need for more and better regulation. And Washington and other governments can help with offers of technical advice and warnings about the cost of failing to take it.

But the scope of the problem is too big, too complex and too urgent for the United States — with $300 billion worth of Chinese imports a year — to wait for Beijing to act. American importers need to provide the first line of defense. Companies like Wal-Mart should send inspectors regularly to visit the factories of Chinese suppliers, to ensure that products are up to acceptable standards. Ultimately the American government will have to enforce these norms.

Unfortunately, the Bush administration has spent the last five-plus years emasculating the American regulatory system. The Consumer Product Safety Commission has seen its budgets repeatedly cut. The Food and Drug Administration has not received the resources it needs and today inspects only a minute share of all imported food.

It is hard to imagine anything good coming out of the China export scandals. But perhaps they will persuade Congress’s new Democratic leaders that America also needs a stronger and more transparent regulatory system.