China and the Pet Food Poisoning

I'm not a big fan of the "Chinese Economic Miracle." I do not believe it's that big of a deal. I think they've made some changes in their system that gives them a new equilibrium point which is higher than their old one, but still much lower than ours. 10% growth in a country where the per capita income is $4000 (China) amounts to $400 per person. 4% growth in a country where the per capita income is $42,500 (the US) amounts to about $1700 per person. Those percentages flashed about on the evening news are irrelevant.

The pet food scandal is a case in point. Our Holy Scholar Mog has a great post summarizing the situation.

Several Chinese suppliers conceded over the weekend that adding melamine to pet food ingredients — now blamed for the deaths of many animals in the United States and possible contamination of the human food supply — is but the latest technique for fooling U.S. companies into thinking they are purchasing a high-quality product.

How totally screwed up do you have to be to allow this to happen? What part of Marketing 101 did you miss? It must have been the whole thing because trust is one of the essential elements of sales. Without it, you get nothing.

Between the Chinese laying waste to their own environment, their software pirating and their utter inability to regulate their businesses, what kind of future would you predict for their economy? Add to that their death spiral demographics as their one-son-per-family, err, one-child-per-family policy manifests itself and you've got a place that is totally screwed.

Read Mog's whole post. She's got lots of great links to more information.