China's President makes vow over product safety

During talks yesterday with the Australian Prime Minister John Howard in Sydney, Australia, held in conjunction with the APEC summit being staged in the capital, President Hu said that his government was taking 'very seriously' the issues relating to product safety, which had warranted 'very serious investigations'. The government action means that inspectors are currently sweeping the country in an effort to ensure that manufacturers in a wide range of industries, as well as farms, restaurants and retail outlets, are complying with production and safety regulations. In light of these inspections the government claims that it has uncovered a series of counterfeit producers and unlicensed manufacturers, as well as finding a number of legal businesses that have not been complying with the required safety standards. Government officials have referred to the action as being an effort to preserve the Made In China label, in view of the detrimental effect it has had in how consumers worldwide perceive goods manufactured and exported out of China. International attention has most recently focused on US toy-maker Mattel, which has implemented a series of recalls to toys made in China that contain potentially toxic substances, most notably lead paint. The action saw Mattel recall three quarters of a million toys, the third such recall in the space of a month, and one that is already having a major impact on the company's operations. The recalls have undoubtedly damaged one of the world's leading toy makers, but have also brought to attention concerns over a whole spectrum of fast moving consumer goods produced in China and exported all over the world, including cosmetics, personal care and food products. For the personal care industriy, toothpaste manufactured in China has presented the biggest problem, underlined by a series of worldwide bans concerning toothpaste containing DEG (diethylene glycol) - a substance used in antifreeze and solvents. A significant number of economy brand, gray market and counterfeit toothpastes, all made in China, have been found to contain significant amounts of DEG in the course of the last few months, with some of the cases involving counterfeit Colgate products. As a result it appears that consumer confidence is wavering. A recent survey of US consumers found that as many as 55 percent of respondents said they were not confident in personal care products manufactured in developing countries like China and India. Realizing the potential economic damage of the export safety crisis, the Chinese government is beginning to take action by putting pressure on personal care manufacturers. Targeting both the toxic toothpaste and other personal care product categories, the government has recently announced a ban on DEG and has pledged $1bn to fight the problem in a bid to reassure the export market.