Page 166 - 2017 White Paper
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7 White Paper on the Business Environment in China
resources” (Zhou 2012) — somewhat tempering the week debunking tales that GMO corn consumption had
optimistic National Bureau of Statistics figures listed reduced sperm counts” (Ibid.). At least some stakeholders
above and reported by China Daily the very same day. remain unimpressed by the public relations effort:
“Scientists have been at pains to show that GMO is already
Another source of ongoing concern is China’s now- part of the food chain: China is the world’s top importer
notorious problems with food safety: of GMO soybeans, used as feed, and also imports GMO
corn from the United States and elsewhere”, all factors
Since 2008, when six children died and 300,000 were which may render the public debate moot (Ibid.).
sickened by melamine-tainted baby formula, the Chinese
government has enacted ever-more-strict policies to Foreign Investment in Agriculture
ensure food safety, including a directive last month from
the Supreme Court calling for the death penalty in cases Foreign investment in agriculture has historically (and
where people die as a result of tainted foods. unsurprisingly) grown alongside reform in the sector.
The Ministry of Commerce (MOFCOM) reported that
It hasn’t helped. If anything, China’s food scandals 2006 saw 458 foreign-invested projects (an increase of
are becoming increasingly frequent and bizarre (Demick 5.8 percent over 2005) with a total utilized investment
2011). In examining the cause of pervasive food safety of US$240 million (an increase of 18.9 percent) (Foreign
issues in China, the Wall Street Journal quoted Beijing- Investment Administration of the Ministry of Commerce
based attorney Lester Ross as suggesting that “one of the of the People’s Republic of China 2008).
biggest issues is the drive to make a buck at any cost […
that] some companies see that by using additives, they Temperate eastern China has historically received
can cut overhead costs or boost profit margins, and they the majority of foreign investment in agriculture (as of
merely aren’t thinking about the affects the additives 2005, nearly 60 percent of the total since the “opening
will have on consumers”. Mr. Ross furthermore attributes up”), although sustained efforts are being made to drive
“too many bureaucracies handling food safety” as an investment into central and western China.
additional source of problems (Burkitt 2011).
Interestingly, in 2006 only 12 of the total 458 foreign-
Regardless of cause and precedent, the at least one invested projects involved investments of more than
effect of ongoing safety issues is thoroughly predictable: US$20 million (Foreign Investment Administration of the
Ministry of Commerce of the People’s Republic of China
“It’s clear that the credibility of the system will suffer,” 2008), suggesting that the dramatic economies of scale
said Peter K. Ben Embarek, theWorld Health Organization’s witnessed in secondary industry have yet to take hold
food safety official.“The (Chinese) consumer will continue in agriculture — which, despite experimentation with
to lose confidence in Chinese products and consumers communal farming in the 1950s, has historically been
abroad will equally lose confidence in Chinese products” driven by individuals or families working small parcels of
(Jiang 2011). land who have in the past been (and currently are) largely
self-sufficient (The Ministry of Agriculture of China 2004).
A final challenge likely to play a greater role in
the future of the sector is consumer acceptance of In 2007, 549 foreign investment projects were initiated
genetically-modified foodstuffs. In the past 30 years, in the sector, but in 2008 that number decreased to 470.
China’s urban population has jumped to about 700 Of those set up in 2008, the majority (332) were in eastern
million from under 200 million, driving up demand for China, with 76 and 62 located in central and western
meat and staples such as rice that scientists say only GMO China, respectively. These projects accounted for a 40
can satisfy (Stanway and Niu 2013). “Winning acceptance percent year-on-year increase in utilized foreign capital
for the more widespread use of GMO,” observes Reuters, (for a total of approximately US$550 million), however
“may be a hard sell in a country frequently in the grip of (Invest in China 2009).
food scares” (Ibid.). Nevertheless, the State m¬edia are
attempting exactly that. On a single day in November In 2009, 515 foreign investment projects had been
2013, “Communist Party mouthpiece the People’s Daily realized in agriculture, up from 2008’s figures; utilized
rejected rumors that eating GMO food could alter human foreign capital similarly grew to reach US$751 million (a
DNA, and news agency Xinhua ran an investigation last 35 percent year-on-year increase). Regional distribution
166
resources” (Zhou 2012) — somewhat tempering the week debunking tales that GMO corn consumption had
optimistic National Bureau of Statistics figures listed reduced sperm counts” (Ibid.). At least some stakeholders
above and reported by China Daily the very same day. remain unimpressed by the public relations effort:
“Scientists have been at pains to show that GMO is already
Another source of ongoing concern is China’s now- part of the food chain: China is the world’s top importer
notorious problems with food safety: of GMO soybeans, used as feed, and also imports GMO
corn from the United States and elsewhere”, all factors
Since 2008, when six children died and 300,000 were which may render the public debate moot (Ibid.).
sickened by melamine-tainted baby formula, the Chinese
government has enacted ever-more-strict policies to Foreign Investment in Agriculture
ensure food safety, including a directive last month from
the Supreme Court calling for the death penalty in cases Foreign investment in agriculture has historically (and
where people die as a result of tainted foods. unsurprisingly) grown alongside reform in the sector.
The Ministry of Commerce (MOFCOM) reported that
It hasn’t helped. If anything, China’s food scandals 2006 saw 458 foreign-invested projects (an increase of
are becoming increasingly frequent and bizarre (Demick 5.8 percent over 2005) with a total utilized investment
2011). In examining the cause of pervasive food safety of US$240 million (an increase of 18.9 percent) (Foreign
issues in China, the Wall Street Journal quoted Beijing- Investment Administration of the Ministry of Commerce
based attorney Lester Ross as suggesting that “one of the of the People’s Republic of China 2008).
biggest issues is the drive to make a buck at any cost […
that] some companies see that by using additives, they Temperate eastern China has historically received
can cut overhead costs or boost profit margins, and they the majority of foreign investment in agriculture (as of
merely aren’t thinking about the affects the additives 2005, nearly 60 percent of the total since the “opening
will have on consumers”. Mr. Ross furthermore attributes up”), although sustained efforts are being made to drive
“too many bureaucracies handling food safety” as an investment into central and western China.
additional source of problems (Burkitt 2011).
Interestingly, in 2006 only 12 of the total 458 foreign-
Regardless of cause and precedent, the at least one invested projects involved investments of more than
effect of ongoing safety issues is thoroughly predictable: US$20 million (Foreign Investment Administration of the
Ministry of Commerce of the People’s Republic of China
“It’s clear that the credibility of the system will suffer,” 2008), suggesting that the dramatic economies of scale
said Peter K. Ben Embarek, theWorld Health Organization’s witnessed in secondary industry have yet to take hold
food safety official.“The (Chinese) consumer will continue in agriculture — which, despite experimentation with
to lose confidence in Chinese products and consumers communal farming in the 1950s, has historically been
abroad will equally lose confidence in Chinese products” driven by individuals or families working small parcels of
(Jiang 2011). land who have in the past been (and currently are) largely
self-sufficient (The Ministry of Agriculture of China 2004).
A final challenge likely to play a greater role in
the future of the sector is consumer acceptance of In 2007, 549 foreign investment projects were initiated
genetically-modified foodstuffs. In the past 30 years, in the sector, but in 2008 that number decreased to 470.
China’s urban population has jumped to about 700 Of those set up in 2008, the majority (332) were in eastern
million from under 200 million, driving up demand for China, with 76 and 62 located in central and western
meat and staples such as rice that scientists say only GMO China, respectively. These projects accounted for a 40
can satisfy (Stanway and Niu 2013). “Winning acceptance percent year-on-year increase in utilized foreign capital
for the more widespread use of GMO,” observes Reuters, (for a total of approximately US$550 million), however
“may be a hard sell in a country frequently in the grip of (Invest in China 2009).
food scares” (Ibid.). Nevertheless, the State m¬edia are
attempting exactly that. On a single day in November In 2009, 515 foreign investment projects had been
2013, “Communist Party mouthpiece the People’s Daily realized in agriculture, up from 2008’s figures; utilized
rejected rumors that eating GMO food could alter human foreign capital similarly grew to reach US$751 million (a
DNA, and news agency Xinhua ran an investigation last 35 percent year-on-year increase). Regional distribution
166
