China falls back into crisis mode

BEIJING —  How quickly things can change.

Exactly one month ago, China was staging the closing ceremony of the Olympics, basking in a haul of gold medals and wide praise for nearly perfect management of the Summer Games.

Today it is struggling with another crisis in a year that, aside from two weeks in August, has been filled with scandal, natural disasters and ethnic troubles.

The revelation that adulterated infant formula has killed at least four Chinese children and sickened 53,000 has presented rulers not only with the most serious quality-control issue in memory, but a daunting political challenge. Officials face suspicions that they knew about the crisis months ago, but hid it from consumers to avoid damping the Olympic excitement.

This crisis has hit particularly hard, in part because the repercussions are so widespread. The contaminated brands are nationally known and supposedly China’s best. The news comes after previous scandals and a massive campaign to improve the quality of Chinese products. And, though any parent would be angry, it also affects the treasured “little emperors” of China’s one-child generation.

At the Capital Institute of Pediatrics in Beijing on Tuesday, a long line of parents waited for their infants to have blood tests and ultrasound exams at government expense. Impromptu nurses stations were set up in the hallway to help with the crowd.

Particularly disconcerting for many is evidence that so many producers were involved while regulators stood by, that warnings were ignored, and that knowledge of the tampering appeared to be widespread. What started this month as news that a single company, Sanlu Group, was selling powdered milk containing the industrial chemical melamine to boost measurements of its protein content ballooned within days to involve 22 companies.

China’s reputation has been tarnished. Taiwan, Singapore, Japan, Malaysia, Brunei and even far-off Gabon either banned or recalled Chinese milk products, coffee packets and chocolate. The U.S. doesn’t allow the importation of Chinese dairy products, but the Food and Drug Administration has stepped up testing of candies and desserts from Asia.

Tang Zhongjun, father of 18-month-old Fukun, said his family used Sanlu milk products since their son’s birth because of their excellent reputation. Several of the companies involved had been considered so safe that they were not subject to inspections.

But four months ago, Fukun started throwing up, suffering from diarrhea and having trouble urinating. His parents took him to four hospitals and eventually discovered that he had three large kidney stones.

“His mother has cried a lot and lost weight,” Tang said. “He still suffers from malnutrition and keeps falling.”

Tang says he doesn’t plan to sue if the government compensates the family adequately.

Melamine also was at the heart of a scandal last year in which North American pets died after eating Chinese-made pet food. The chemical reportedly was added by unscrupulous suppliers to make products appear protein-rich. Ingesting melamine, used in plastics and fertilizer production, can cause malnutrition and kidney damage.

Previous Chinese quality-control scandals have involved toothpaste, seafood, tires, medicine and toys. Analysts say they underscore the downside of a political system in which accountability is limited and conflicts of interest rife.

“The Chinese Communist Party might be able to calm things down this time,” said Alfred Chan, a professor at Canada’s University of Western Ontario. “The danger is that things accumulate to an eventual breaking point. This is an emotional issue that greatly affects the population, one that has received a great deal of publicity and shows the party in a very unflattering light.”

The Chinese people are growing increasingly assertive, and the government can no longer simply stifle bad news. The Internet has been ablaze with comments reflecting parents’ fear and anger.

“Where are the concerned parties that are supposed to inspect the quality?” asked user myy8206 on the discussion forum xici.net. “They should be taken out and shot!”

Well-known TV host Liu Yiwei, in a column in a Shanghai newspaper, asked why regulators don’t oversee food production as carefully as they oversee the media. Films “don’t injure people or take their lives,” he wrote. “Why can’t officials inspect baby formula as strictly as they censor films?”

The milk scandal is the latest headache for leaders who grappled with a storm in February, Tibet riots in March, the protest-marred Olympic torch relay in April and a massive earthquake in Sichuan in May.

China has become a model for many developing countries as it has elevated millions of people from poverty. But economic and social reforms have raced ahead of political reform.

Powerful individuals often hold both important economic and political posts. For instance, Sanlu’s chairwoman, who was sacked, was also an important local Communist Party official.

“The reality in China is there’s no separation at all,” said Arthur Kroeber, Beijing-based editor of China Economic Quarterly. “It’s endemic.”

Particularly damning are suggestions that local officials and top executives were warned about the problem in March, or even earlier. But with little pressure from voters, shareholders, an independent news media or consumer advocates, those involved apparently felt little need to address it.

Investigators haven’t fully explained what happened, but analysts suspect that a near-total ban on bad news before the Olympics led to a coverup that jeopardized the lives of thousands more children.

Sanlu is 43%-owned by New Zealand’s Fonterra Co-operative Group. The dairy giant said it was aware in August of problems with Sanlu production, several weeks before the public was informed, and pressed its Chinese partner and local officials to disclose the information, but they refused.

The crisis also suggests that, even as the senior leaders tried to address one threat, they inadvertently may have created another. Economic experts say that at least part of the responsibility for the milk crisis may be traced to the Communist Party’s fear that higher food prices could set off protests. That led officials to discourage price increases or to impose caps. Suppliers, unable to raise prices as their costs rose, came under pressure to cut corners.

As the scandal has intensified, the party has fallen back on traditional damage-control tactics. It has arrested 19 people and sacked several officials, including the longtime head of the main government watchdog agency. It has restricted news about the scandal in the mainstream news media. And it has warned lawyers trying to represent the victims.

“We’ve been told not to talk to the foreign press,” said one attorney trying to help victims obtain compensation.

Many of the same tactics were used to quell anger over shoddy school construction after a disproportionate number of children died in the Sichuan earthquake. But with each major crisis, some analysts say, it becomes more difficult to contain the anger below the surface in a society riven by corruption, inequity and environmental degradation.

“Very few business leaders or local officials really care about the environment or consumer quality,” said Cheng Li, senior fellow with the Brookings Institution in Washington. “At some point this will create a real political disaster.”

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mark.magnier@latimes.com