Buyer beware in freewheeling China
Endemic corruption and industrial-scale fraud are taking a toll on public trust, writes China correspondent Rowan Callick
February 26, 2007
HERE'S a strange thing. Millions of mainland Chinese are visiting high-rent Hong Kong - now booming again, thanks chiefly to its soaring financial markets - to buy clothes, bags, watches and other goods made back home in the People's Republic.
It helps that they can now simply fill their wallets with yuan and find Hong Kong sales assistants, who once scorned their money with its Mao image on every note, now eager to accept it.
For as the yuan steadily floats up against the US dollar, it has recently overtaken the HK dollar, which remains pegged to the greenback.
Hong Kong does not levy special luxury taxes on goods as China does. But the prices are still well above what the same brand goods often fetch on the mainland.
The principal reason they want to buy those goods in Hong Kong is simply that they can be trusted - most of them, at least - to be and do what they claim.
At first flush, a visit to a market in Beijing, Shanghai or Shenzhen appears to open an Aladdin's Cave of unbelievably cheap goods, once the ritual bargaining has brought them down to the usual third or so of the first asking price.
But no. Sad experience soon teaches that however thrillingly cheap a pair of shoes, an MP4 player or a coat is, when it falls apart, its zip breaks, or it stops working within a week or two - as does happen so often - it amounts to money thrown down the drain, not a bargain at all.
Shopping in China makes an Australian respect immensely the persistence and skill of the buyers and brokers who obtain for our stores goods of reliable quality from those same factories that also churn out the trash for the local, largely unsupervised Chinese market. When it comes to, say, clothes or electrical goods, this failure to ensure consistently trustworthy products can be viewed as mere opportunism, amplified by the sheer brutality of the competition and the constant shaving of margins.
So what if a bag with a name on it like Louis Vuitton or Prada soon falls apart?
There's a sound argument that such firms should be paying the buyers to carry around objects that brazenly advertise their brands anyway.
But what happens when the products determine life or death for the buyers?
Suddenly this successful industrial pattern, this casualness about trust and honesty in the absence of externally imposed quality control, veers into the cruel and the criminal.
The World Health Organisation last week said that about 200,000 of the million people who die every year from malaria would still be alive if the preventive drugs they were taking, especially the new products that can be far more effective than chloroquine, were genuine. Up to half of them are fakes and the lion's share of it is Made in China, like everything else today.
The biggest commercial victim of this murderous trade is of course the Chinese company that makes most of the genuine drugs, Guilin Pharma, whose anti-forgery holograms have been carefully copied.
And the first casualty of such massive, industrial-scale fraud is trust in both medicines and the structures that prescribe them - driving people in Asia and Africa back to folk cures, compounding the casualties.
Corruption is endemic in China, springing from unaccountable one-party governance. Thus dishonesty is inevitably found in the top circles, otherwise it would be more readily eradicated along with other social evils, such as democratic inclinations.
Each condemnation of another leader who has been exposed as corrupt sounds less convincing and more shrill than the last.
The underlying reason for such a downfall, everyone in China knows, is not the leader's corruption per se, but political miscalculation.
The head of China's Bureau of National Statistics, Qiu Xiaohua, was removed last year because he apparently received bribes to publish the best data money could buy - at the behest of officials whose salaries and promotions depend on the appropriate statistics, including regional growth rates.
In December, it was revealed that Zheng Xiaoyu, who was the inaugural head of the State Food and Drug Administration, holding the position for seven years, had taken bribes from drug companies to license their products, allowing them to bypass safety and testing procedures.
Vice Premier Wu Yi, the most senior woman in the Government, earlier this month called Zheng a criminal while addressing a televised national conference on regulating food and drugs. A major investigation is consequently under way, to assess how to respond to this scandal.
Early inquiries indicate that no fewer than 168,740 drug certificates issued during Zheng's reign will now need re-examination before the products are approved again for public use.
Already, one of the certificates Zheng issued has been linked to the deaths of 10 patients from a defective antibiotic. A former deputy to Zheng, responsible for issuing production licences, was sentenced to 15 years' jail in November for taking about $130,000 in bribes from domestic drug companies.
The impact of the resulting false products is ubiquitous.
Last year, for instance, a leopard escaped from a Chinese zoo, and keepers managed to shoot the distressed animal with tranquilliser pellets. They had no effect at all. Eventually, police had to kill the leopard, and tests proved that the tranquilliser pellets were useless frauds.
It is impossible for the Chinese public to gain a full sense of how these corrupt processes work, or to sheet home the blame appropriately.
For, as in the cases of the imaginative statistician and of the regulator who ticked through useless or harmful drugs, senior party members are rarely tried in criminal courts, which are themselves even less commonly open to the public or the media.
Qiu and Zheng have been subjected instead to shuanggui, a highly secretive process of interrogation conducted in unknown locations by the Communist Party's disciplinary commission.
Vice Premier Wu Yi might have called Zheng a criminal, but her Government appears reluctant to hand its own wrongdoers over to the criminal courts for public trials.
It is not such a long leap from these travails to Beijing TV's version of the British and Australian Antiques Roadshow.
Keen collector Wang Gang, an actor, hosts the show, in which amateur collectors submit their objects to a panel of experts to assess their provenance and value, just as in Britain and Australia.
The big point of difference is that in front of Wang are a brush dipped in red ink and a golden mallet. If a painting brought for assessment is deemed a fake, Wang applies the red ink vigorously. If, say, a putative Ming bowl is called counterfeit, he smashes it with the mallet.
Only items whose owners admit in advance they are imitations escape this destruction. In the first nine episodes, Wang destroyed seven ceramic objects and a number of paintings.
There are plenty more where they came from. But the message is the right one.