Food safety, Product Quality and Pesticide Use

So China is spening $1 billion on food safety? This is undoubtedly an attempt to reassure the world that Chinese goods are safe in response to numerous product safety stories that have been a staple of the US and world press in recent months.

The fear is that Chinese exports will be negatively affected and whilst Chinese GDP has been growing rapidly along with domestic consumption and incomes, China is still dependent on its export markets.

A reputation for low quality and dangerous goods can takes years to throw off. This is probably a wise investment. The question is why do they not spend more and why wait so long to do it.

China Spending $1 Billion on Food, Drug Safety [PlantetArk]

BEIJING - China will spend more than $1 billion improving food and drug safety by 2010 and the regulator will be given stronger oversight powers, an official said on Wednesday as fears persist over Chinese products.

China has been struggling to convince the world its produce is safe following a series of scandals over tainted pet food, toys, tyres, toothpaste, medicine and fish.

According to a new poll, US consumers are extremely wary of products made in China, and nearly two-thirds said they would support a boycott of Chinese goods.

China's State Food and Drug Administration spokeswoman, Yan Jiangying, said the government had earmarked 8.8 billion yuan ($1.16 billion) for food and drug safety over the current Five Year Plan, which runs to 2010.

Part of this would be spent on a large, new laboratory, she said, adding this was the first time the spending figure had been made public. Yan did not provide a comparison for previous years.

"Once the Five Year Plan has been completed, the abilities and the base of the regulator will be substantially raised," Yan said. "There will be an enormous improvement in the system for guaranteeing food and drug safety for the public."

New rules would give the watchdog the power to seal factories and seize whatever materials they need when probing sub-standard goods, she added.

Yan said her department would also take the safety message nationwide, starting out in the enormous countryside, home to 60 percent of the 1.3 billion population.

"We will focus on rural food safety," Yan said.

A deputy agriculture minister admitted recently that the backward state of Chinese farming was a major obstacle to raising food safety.

Despite repeated government assurances they are taking a responsible attitude towards food and drug safety, there has been little let up in the barrage of bad news.

State media said on Wednesday, the beginning of the one-year year countdown to the Beijing Olympics, the government would launch a campaign to crack down on the use of highly potent and poisonous pesticides which are banned but still in use.

Five pesticides were banned earlier this year, and the Agriculture Ministry was compiling a blacklist of companies still making them, the official China Daily said.

In rural China there was a problem with farmers improperly using chemicals and spraying them on crops just before they were gathered and sold, the report said.

"As part of the government's food safety strategy, it will educate farmers how to properly use pesticides," the newspaper added.

China uses twice as much pesticide annually as is actually needed which has exacerbated the country's food safety problems, it said. (US $1=7.569 Yuan)

This relates to another story in today's PlanetArk:

China to Crack Down on Banned Pesticide Use

BEIJING - China will launch a campaign to crack down on the use of highly potent and poisonous pesticides which are banned but still in use, a state newspaper said on Wednesday, as fears persist over the country's food safety.

Five pesticides were banned earlier this year, and the Agriculture Ministry was compiling a blacklist of companies still making them, the official China Daily said.

Three companies were still allowed to make the chemicals, it added, but only "in emergency situations to control pests, and under strict government supervision", it added.

In rural China there was a problem with farmers improperly using chemicals and spraying them on crops just before they were gathered and sold, the report said. "As part of the government's food safety strategy, it will educate farmers how to properly use pesticides," the newspaper added.

China uses twice as much pesticide annually as is actually needed which has exacerbated the country's food safety problems, it said.

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Green Leap Forward

Interesting article looking at the environmental problems currently besetting China. This makes for an excellent read even if it is rather alarmist.

The Green Leap Forward [Washington Monthly]

The article is of primary interest for the way it throws around supposed facts. They make interesting reading:

1. Ninety percent of the country’s cities have contaminated groundwater.
2. The World Bank predicts that in the next fifteen years, China’s shortage of clean water will create 30 million “environmental refugees.”
3. As much as 40 percent of the air pollution in Japan and Korea can be traced to China - now China's pollution is becoming a global problem.
4. "On bad days, a quarter of Los Angeles’s smog originates in China." - now that must be an incentive for the US to act.
5. "Just by breathing the city air, Lanzhou’s 3 million residents inhale the equivalent of a pack of cigarettes a day." - there have to be side effects down the line. Just as the UK bans smoking in doors. No such luxury for the Chinese.
6. "Time reported that only 6 percent of Chinese agricultural products imported to the United States are free from pollution." - what is the equivalent figure for US exports I wonder.

This is a good description of the situation in Bejing - no wonder the Chinese are making such effort for the Olympics. Athletes and the equivalent of a packet a fags a day do not go well together.

Like other cities in China, Beijing has a daily weather report and a daily pollution report. On the increasingly crowded freeways, drivers can see only so far ahead; each car leaves a wake in the smog. The dank air creeps inside buildings, into cars, into hotel rooms, leaving you nowhere to escape the distinct smell and the feeling of a weight always on your chest. The sun looks like a flashlight wrapped in cotton gauze, and the sky remains beige no matter the time of day. Most days, the city has no discernible skyline. Most nights, no moonlight or starlight pierces the darkness.

Now lets get to the ECONOMICS. Ultimately this is what is of primary concern for the average Chinese citizen and politican/official. My bold.

More important, environmental problems now threaten the sustainability of China’s economic expansion. Already the costs of environmental cleanup, property damage, and lost productivity are staggering. China’s State Council, the nation’s highest administrative body, reported that pollution cost the country more than $200 billion in 2005, almost 10 percent of the country’s GDP. Industry releases 2,000 tons of airborne mercury each year, which settles into the soil, contaminating 12 million tons of grain each year and threatening food safety, including China’s $31 billion agricultural export market. (Time reported that only 6 percent of Chinese agricultural products imported to the United States are free from pollution.) The future portends to be more alarming still. Water scarcities could shut down paper mills and petrochemical plants. Air pollution in Hong Kong could force a mass exodus of talent (already hedge fund managers are fleeing the smog for Singapore). The country’s deputy environmental director, Pan Yue, has warned, “China’s economic miracle will end soon because the environment can no longer keep pace.”

Even more troubling, the effects of pollution—poisoned water and contaminated fields—are provoking riots in the countryside. Or, as China’s environment minister, Zhou Shengxian, has observed, the environment has become an issue that “triggers social contradictions.” In 2005, the government reported 51,000 pollution “disputes,” many of them violent. More villages each year form local militias to guard water rights. This makes Communist Party leaders deeply uneasy. After all, for millennia China’s history has been defined by dynasties rising and falling, the ruling powers frequently toppled by angry peasants whose welfare was neglected. As Minxin Pei, the director of the China Program at the Carnegie Endowment for International Peace, explained, “The government is willing to tolerate anything but social instability.”

The trouble, and as we have covered numerous times in this blog under the corruption tag, is that it matters not how strict the country's environmental regulations, they are simply not enforced. This article gives us a hint as to why.

The central government no longer maintains a permanent presence in the provincial capitals, so there is no energetic national oversight of what happens in a place like Lanzhou. Local environmental bureaus are supervised and financed not by Beijing but by provincial authorities whose officials would be unable to afford their chauffeur-driven cars without payoffs from potential polluters. As a result, China has numerous national laws that sound wonderful on paper but can’t be enforced. David Lampton, head of the China studies department at Johns Hopkins University’s School for Advanced International Studies, has popularized the term “implementation bias” to describe this phenomenon. He defines it as “the situation in which every central initiative will be distorted in favor of the organization or locality responsible for implementation.”

This breakdown in governance is so pronounced that, in defiance of Beijing’s ambitious targets, the country’s environment is getting worse, not better. Official reports likely understate the problem, but those numbers are troubling enough. Beijing vowed in 2002 to reduce sulfur emissions by 10 percent in three years, yet they climbed by nearly 30 percent. More than 4,000 rogue mines leach mercury into the soil. An estimated one in five power plants operate illegally—enough to fully power the United Kingdom. Last year, Mao Rupai, chair of the congressional environmental committee, estimated that in some far-flung provinces as few as 30 percent of environmental regulations are upheld.

H/T: Conservation Finance

The "UK Good University Guide" August 2007

A new "ranking" of "UK Universities" has just been launched with its own website. It also includes a subject breakdown as well as allowing the student to customise the ranking to give a higher weighting (or not weighting at all) to certain aspects.

"The Good University Guide"

This is a good improvement on existing rankings.

The categories that Universities are ranked by are:

1. Student satisfaction - A measure of the view of students of the teaching quality.

2. Research Assessment - A measure of the average quality of research undertaken.

3. Entry Standards - The average UCAS tariff score of new students under 21.

4. Staff-Student ratio - A measure of the average staffing level in the university.

5. Academic Services Spending - The expenditure per student on all academic services.

6. Facilities Spending - The expenditure per student on staff and student facilities.

7. Good Honours - The % of graduates achieving a first or upper 2nd honours degree.

8. Graduate Prospects - A measure of the employability of a university’s graduates.

9. Completion - A measure of the completion rate of those studying at the university.

Personally, I believe that one should customise the ranking and consider most importantly the entry standards (3) and Research Assessment (2). See HERE for more detailed descriptions.

There are numerous problems with the data - two many high scoring Universities supplied their own data. Not good enough. Secondly, the weights applied to give the default table are inappropriate in my opinion.

The Website has other strengths. It gives a review of each city, has a section for overseas students which gives a large number of statistics that I may blog on at a later date. e.g. Table 3 - where do overseas students study. I do NOT believe the numbers in this table however but that argument can wait for another day.

So what about Economics? Here is the top 20 UK Universities using the default weightings. Full listing HERE.

Rank Institution RAE Tariff Destinations Overall
1 LSE 5* A 508 88 100.0
2 Cambridge 5 B 538 92 98.4
3 UCL 5* A 477 86 98.3
4 Warwick 5* B 483 86 96.7
5 Oxford 5 B 538 76 93.8
6 Nottingham 5 A 481 78 93.7
7 Bath 5 B 452 78 91.1
8 Bristol 4 A 449 80 90.7
9 Durham 4 B 473 80 90.3
10 York 5 A 463 66 89.5
11 Southampton 5 A 428 68 88.8
12 St Andrews 4 B 458 76 88.6
13 Edinburgh 4 B 468 74 88.4
14 Exeter 5 B 407 70 87.0
15 Royal Holloway 4 B 369 80 86.3
16 Lancaster 5* B 374 64 86.2
=17 Birmingham 4 B 419 72 85.9
=17 Leeds 5 C 415 74 85.9
19 SOAS 4 B 365 78 85.6
20 Cardiff 5 B 382 68 85.5

I would say that this is a fair approximation but still contains a number of errors. There is the issue of whether "Economics" units within Business Schools should be treated in the same way as stand a lone department. The RAE scores for some of these departments are simply misleading as they did NOT go in as part of the ECONOMICS RAE but may have gone in with Business or development studies thus artificially inflating certain Universities.

There is also the issue that different departments are more suitable for undergraduate than postgraduate where research is far more important.

I will post more on this later but this new site is useful but must be seen in conjunction with other rankings that are listed in the sidebar.


The following posts may be of interest:
Econphd Ranking of "Economics departments"

Ten Reasons Why You Should Study in Britain

RateUKcourses.com?

Studying "Economics in the UK": General Links

Which UK University to study in? "Academic Ranking of World Universities"

Studying in the UK: Cost of Accommodation

World University Rankings: Rankings and text

"UK University Ranking": large city effect

Economists speak out against US anti-China sentiment

It is good to see the Economics profession standing up to be counted. Of course this has no chance of succeeding but you have to try. I would have signed this petition.

After teaching trade theory for so many years it is good to see that these simple concepts are being brought into the political arena.

We, the undersigned, have serious concerns about the recent protectionist sentiments coming from Congress, especially with regards to China.

By the end of this year, China will most likely be the United States' second largest trading partner. Over the past six years, total trade between the two countries has soared, growing from $116 billion in 2000 to almost $343 billion in 2006. That's an average growth rate of almost 20% a year.

This marvelous growth has led to more affordable goods, higher productivity, strong job growth, and a higher standard of living for both countries. These economic benefits were made possible in large part because both China and the United States embraced freer trade.

As economists, we understand the vital and beneficial role that free trade plays in the world economy. Conversely, we believe that barriers to free trade destroy wealth and benefit no one in the long run. Because of these fundamental economic principles, we sign this letter to advise Congress against imposing retaliatory trade measures against China.

There is no foundation in economics that supports punitive tariffs. China currently supplies American consumers with inexpensive goods and low-interest rate loans. Retaliatory tariffs on China are tantamount to taxing ourselves as a punishment. Worse, such a move will likely encourage China to impose its own tariffs, increasing the possibility of a futile and harmful trade war. American consumers and businesses would pay the price for this senseless war through higher prices, worse jobs, and reduced economic growth.

We urge Congress to discard any plans for increased protectionism, and instead urge lawmakers to work towards fostering stronger global economic ties through free trade.

H/T: Mankiw

Military Spending: The cost of maintaining the biggest army on the planet

The Times article of yesterday provides some interesting facts and figures on the size and cost of maintaing an army of 2.3 million personnel (with another 800,000 reserves).

This post just picks out some of the more interesting numbers.

World’s largest army turns 80 with a show of strength and weakness

As part of the publicity campaign to mark the PLA’s 80th anniversary, the soldiers could reveal that they were woken at 6am in summer and that they earn 200 yuan (£13) a month as privates. But the programme for their daily training, like most other matters, was not open for discussion.

Not a large salary. The worry is that this salary is becoming increasingly worse relative to the wages paid in the private sector. At some point it will become dangerously low.

The budget for the 2.3 million-strong PLA balloons each year, rising 17.8 per cent to 351 billion yuan (£23.4 billion) this year — roughly the same as defence spending in Britain and Japan. That is still one tenth of US military costs. Analysts say that actual spending is much higher, since the figure in the budget does not include significant weapons purchases.

So it Chinese military spending a lot or a little? What is the per capita spending - a lot lower than the UK or France and China is a big country.

Facts:

Standing force

— China’s combined military forces are almost 2.3 million personnel with a further 800,000 reserves. Paramilitary armed police, border guards and internal security contribute another 1.5 million

— The People’s Liberation Army numbers 1.6 million active troops, divided equally between conscripts and volunteers. They are split into 18 self-contained groups of infantry, artillery and air defence personnel, and are deployed across China’s seven military regions

— Strategic Missile Forces, the nuclear tip of China’s military pyramid, consist of 100,000 personnel and 800 missiles – 46 of these are intercontinental models capable of deploying nuclear warheads at up to 8,000 kilometres (4,500 miles) range

— China’s seas are defended by three fleets with a cumulative complement of 255,000 men, 76 surface vessels and 58 submarines. It has only one nuclear Xia submarine with a ballistic missile capability

— 210,000 serve in China’s air force, which can field more than 2,500 combat aircraft

— Pilots fly mostly retooled Cold Warera craft such as the J-7 Fishbed, based on the Russian MiG-21F, or domestic designs such as the J-8 Finback. China purchased SU-27 fighter bombers from Russia after abandoning domestic attempts to develop an equivalent capable of midair refuelling and maritime combat

Sources: International Institute for Strategic Studies; Federation of American Scientists; www.globalsecurity.org

Asia Rising: 40 year review

From the IMF comes a new report.

Asia's striking growth performance has long attracted the interest of both policymakers and researchers. This paper undertakes a cross-country analysis of productivity growth at both the aggregate and sectoral levels.

Asia Rising: A Sectoral Perspective[PDF]

Abstract

This paper undertakes a cross-country analysis of productivity growth at both the aggregate and sectoral level. It finds that Asia’s remarkable output growth over the past 40 years reflected both high investment, and rapid productivity increases. These factors were in turn supported by the region’s relatively strong institutional and policy environment, which encouraged resource shifts from low- to high-productivity sectors. Looking ahead, sustaining rapid growth requires meeting a number of key challenges: (i) implementing reforms to boost productivity in the increasingly important, but currently lagging, service sectors; (ii) providing policy support for continuing the shift of resources from agriculture to industry and services; (iii) strengthening policy frameworks in late-developing countries.

The IMF's WORLD ECONOMIC OUTLOOK is also a publication worth knowing about.

Factory Life in China

Came across a fascinating blog looking at the "Made in China" phenomenon.

Good videos and interesting stories.

Bunnie's Blog

This is for the "Made in China" category and it gives a real insight into the production set up in China.

I have added this blog to the ChinaEconomic blogroll.

H/T: ResponsibleChina