Until recently Zheng Xiaou was head of the State Food and
Drugs Administration for China. He was arrested in May, and
charged with being responsible for the sale of six
different medicines manufactured in China. These same six
medicines were fakes. The sales took place during Zheng's
six years as the head of the department.
One of the medicines was a gall bladder medication. It
contained inappropriate ingredients. It was consequently
established that several people (five) died as a result of
using the pills. Unlike many other countries, a figure like
Zheng Xiaou would be arrested, given a trial that would
take five years, and then perhaps spend some time in
prison. In China he was executed a couple of weeks ago,
less than 2 months after his arrest. Zheng was convicted of
taking over $800,000 in brides from eight different
pharmaceutical companies.
What's Happening Here?
China is finding itself in the same position that Japan was
in the 1970's. Back then, Japan was industrializing, and
having massive quality control problems. This went on for
years. There was a time that "Made in Japan" meant a
product that was inexpensive (cheap) with terrible quality.
Over a period of 20 years, the Japanese mastered quality
control, thanks to the works of Dr. W. Edwards Deming, the
man who understood quality processes better than any other
American. The Americans didn't listen to him, but the
Japanese treated him like a God. The rest they say is
history.
Now China finds itself in the same position as Japan in the
1970's but there are differences. Rapid industrialization
in China without the proper Deming type systems in place is
leading to quality control problems that are now making
headlines on a weekly basis. From pet foods to tainted
poisonous toothpaste, China has problems across the board.
Tires have been manufactured lacking normal safety
features. Other problems have included milk powder being
faked. Several babies died as a result of its consumption.
They even used a cancer-causing dye for the coloring of egg
yolks.
Coupled with these product safety issues is an inflexible
political system still based on communist ideology? This
cannot continue indefinitely. No economic system in history
can go through rapid economic growth and at the same time
maintain an inflexible political system, not based on the
rule of law. It has never happened before, and it is not
going to work now.
What's News HERE is not News in China!!!
The problems taking place in China are not news to those
living in China. These issues have been going on for quite
a while, and run much deeper than the executions of a few
top officials. Take China's coalmines as an example.
Thousands of Chinese workers die every year in China's
mines because of poor safety conditions. There is not a
single coalmine in America that would tolerate China's
safety standards. There is an absence of ethical standards,
promulgated by an insatiable desire to chase dollars, with
no consideration for the lives of workers. For more on this
topic, please visit our website.
----------------------------------------------------
Richard Stoyeck's background includes being a limited
partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn
Loeb, Arthur Andersen, and KPMG. Educated at NYU, and
Harvard University, today he runs Rockefeller Capital
Partners and
StocksAtBottom.comhttp://www.stocksatbottom.com/made_in_chin
a.htm
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