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6 White Paper on the Business Environment in China
conversion, bringing the inefficiencies of current land tenure government altered most of its content. The Draft FSL “focuses
arrangements and the need for reform into even clearer focus.” 41 on risk assessment and management. It requires increased atten-
tion to government monitoring of specific risks (i.e., foodborne
However, it also cautions that reforms to land, public fi- illnesses, illegal additives, and other forms of contamination),
nance and the hukou system “require a carefully coordinated assessment of those threats by a centralized government body,
approach. Reforms need to recalibrate the use of land, improve and the subsequent enactment of standards or adoption of
land governance, and reduce the government’s dependence on other mitigation measures that are proportional to the size of
revenue from land conversions and land leases. They could the risk. At the same time, the Draft FSL also requires greater
facilitate the transition from land asset sales to a modern tax responsibility on the part of manufacturers and distributors of
system aligned better with China’s new economic structure. food. For example, the draft requires self-audits by food man-
They could also deepen land markets, clarify rural citizens in ufacturers.The Draft FSL imposes additional requirements on
their property rights and land assets at home, and boost their entities in various segments of the food industry and in different
opportunities and entitlements for integrating into cities. Thus parts of the supply chain (manufacturing, distribution, retail)
to increase the efficiency of land use, it is necessary to ensure to ensure safety. For example, it requires that infant formula
the security of agricultural land tenure, including introducing manufacturers implement special good manufacturing practices
the transferability of land rights and reforming land acquisi- and that they self-audit and report on those audits to local food
tion and compensation practices. This action includes rolling and drug authorities. It also prohibits contract manufacturing
out the recent policy decision to grant indefinite land use rights by infant formula manufacturers.” 46
to farmers, to expand land registration, and to strengthen rural
land markets. “41 Among the most far reaching requirements are those relat-
ed to penalties. The Draft FSL increases penalties and liabili-
Legislating Towards Food Safety ties significantly. Specifically, the draft increases administrative
Food safety remains an ongoing concern, so in yet another fines by agencies for FSL violations, the potential for civil com-
pensatory and punitive damages in related litigation, and the
attempt to legislate its way to food safety, China released a potential for criminal prosecution. Perhaps more ominous is
new five-year plan “to upgrade its food safety regulations in the pledge to strengthen the “link” between food safety regu-
June 2012. According to the official Xinhua News Agency, the lation and criminal penalties. The Draft FSL calls for “prompt”
government will revamp outdated rules, review and abolish reporting of suspected food safety crimes by CFDA and other
contradicting or overlapping standards, and draft new codes administrative agencies to the Ministry of Public Security (Chi-
by 2015. There are currently more than 2,000 national food na’s police force) for immediate investigation. China has already
regulations and 2,900 industry-based regulations on the books, cracked down on violators of food safety standards through the
many of them overlapping or contradictory.”45 Criminal Code over the last several years. The draft law increas-
es the trend toward criminal prosecution in this area.46
According to the plan, “14 government departments, in-
cluding the ministries of health, science and technology, and
agriculture, will work to revamp safety standards, with priority
given to dairy products, infant food, meat, alcohol, vegetable
oil, seasoning, health products, and food additives. “It is an
onerous task for the government to ensure food safety,” because
China’s food industry still suffers from “nonstandard manage-
ment and many hidden safety risks,” said a statement released in
June 2012 following a State Council executive meeting presided
over by Premier Wen Jiabao. The State Council vowed a “vigor-
ous crackdown” on those who endanger food safety. The gov-
ernment should “enhance supervision by setting up an efficient
mechanism that covers all links in the food industry and a rigid
food recall system for destroying defective products,” the state-
ment said. Moreover, the government will make “special efforts”
to establish standards for testing contaminants, food additives,
microorganisms, and pesticide and animal drugs. 45
In 2014, the National People’s Congress (NPC), released
a draft of the revised Food Safety Law (Draft FSL) for pub-
lic comment. Formerly called the Food Hygiene Law and re-
named Food Safety Law in 2009, which was also when the
120
conversion, bringing the inefficiencies of current land tenure government altered most of its content. The Draft FSL “focuses
arrangements and the need for reform into even clearer focus.” 41 on risk assessment and management. It requires increased atten-
tion to government monitoring of specific risks (i.e., foodborne
However, it also cautions that reforms to land, public fi- illnesses, illegal additives, and other forms of contamination),
nance and the hukou system “require a carefully coordinated assessment of those threats by a centralized government body,
approach. Reforms need to recalibrate the use of land, improve and the subsequent enactment of standards or adoption of
land governance, and reduce the government’s dependence on other mitigation measures that are proportional to the size of
revenue from land conversions and land leases. They could the risk. At the same time, the Draft FSL also requires greater
facilitate the transition from land asset sales to a modern tax responsibility on the part of manufacturers and distributors of
system aligned better with China’s new economic structure. food. For example, the draft requires self-audits by food man-
They could also deepen land markets, clarify rural citizens in ufacturers.The Draft FSL imposes additional requirements on
their property rights and land assets at home, and boost their entities in various segments of the food industry and in different
opportunities and entitlements for integrating into cities. Thus parts of the supply chain (manufacturing, distribution, retail)
to increase the efficiency of land use, it is necessary to ensure to ensure safety. For example, it requires that infant formula
the security of agricultural land tenure, including introducing manufacturers implement special good manufacturing practices
the transferability of land rights and reforming land acquisi- and that they self-audit and report on those audits to local food
tion and compensation practices. This action includes rolling and drug authorities. It also prohibits contract manufacturing
out the recent policy decision to grant indefinite land use rights by infant formula manufacturers.” 46
to farmers, to expand land registration, and to strengthen rural
land markets. “41 Among the most far reaching requirements are those relat-
ed to penalties. The Draft FSL increases penalties and liabili-
Legislating Towards Food Safety ties significantly. Specifically, the draft increases administrative
Food safety remains an ongoing concern, so in yet another fines by agencies for FSL violations, the potential for civil com-
pensatory and punitive damages in related litigation, and the
attempt to legislate its way to food safety, China released a potential for criminal prosecution. Perhaps more ominous is
new five-year plan “to upgrade its food safety regulations in the pledge to strengthen the “link” between food safety regu-
June 2012. According to the official Xinhua News Agency, the lation and criminal penalties. The Draft FSL calls for “prompt”
government will revamp outdated rules, review and abolish reporting of suspected food safety crimes by CFDA and other
contradicting or overlapping standards, and draft new codes administrative agencies to the Ministry of Public Security (Chi-
by 2015. There are currently more than 2,000 national food na’s police force) for immediate investigation. China has already
regulations and 2,900 industry-based regulations on the books, cracked down on violators of food safety standards through the
many of them overlapping or contradictory.”45 Criminal Code over the last several years. The draft law increas-
es the trend toward criminal prosecution in this area.46
According to the plan, “14 government departments, in-
cluding the ministries of health, science and technology, and
agriculture, will work to revamp safety standards, with priority
given to dairy products, infant food, meat, alcohol, vegetable
oil, seasoning, health products, and food additives. “It is an
onerous task for the government to ensure food safety,” because
China’s food industry still suffers from “nonstandard manage-
ment and many hidden safety risks,” said a statement released in
June 2012 following a State Council executive meeting presided
over by Premier Wen Jiabao. The State Council vowed a “vigor-
ous crackdown” on those who endanger food safety. The gov-
ernment should “enhance supervision by setting up an efficient
mechanism that covers all links in the food industry and a rigid
food recall system for destroying defective products,” the state-
ment said. Moreover, the government will make “special efforts”
to establish standards for testing contaminants, food additives,
microorganisms, and pesticide and animal drugs. 45
In 2014, the National People’s Congress (NPC), released
a draft of the revised Food Safety Law (Draft FSL) for pub-
lic comment. Formerly called the Food Hygiene Law and re-
named Food Safety Law in 2009, which was also when the
120
