Bans on China's exports may hit SGX-listed China stocks
It never rains but it pours.
And how true that idiom is for China's current predicament.
Just weeks after news on the China slave scandal exploded past Chinese shores, China's food exports, among other things, have come under scrutiny.
It all started with some pets in the US dying after having eaten some pet food containing Chinese-made wheat flour, which was contaminated with melamine. That prompted a massive recall on American pet food.
That was the beginning of a whole slew of export investigations.
Then came the discovery of a potentially toxic chemical in Chinese toothpaste exports – diethylene glycol, a substance used in anti-freeze.
US toymaker, RC2, also recalled “Thomas the Tank Engine” toy trains made in China after finding out the paint used on some of them contained lead.
At the beginning of last week, a New Jersey tire importer recalled 450,000 Chinese-made tires after a fatal accident, and finding out that those tires did not adhere to their safety standards.
End of the week saw the US Food and Drug Administration saying it will block the imports of Chinese farm-raised seafood due to concerns of contamination.
The European Union said last Friday that it will follow the lead of the FDA on seafood.
Japan has also stepped up the seafood scrutiny after finding an increase in the number of shipments of Chinese eels that did not meet Japanese safety standards.
Now China may be new to the public relations game, but if it does not take action on these issues soon, its drive up towards the 2008 Beijing Olympics could be heading down the drain.
You should be worried since the SGX-listed Chinese stocks you hold may be implicated in these export investigations.
Stocks like China Dairy, China Milk, China Food Industries, among others, will probably on the watch list.
There are a few things China should do to start controlling the damage.
First, it really should quit playing tit for tat.
China has recently announced rejecting US-imported food like orange pulp and dried apricots because they didn't meet its safety standards. This seems too much of a coincidence, doesn't it?
Second, it should take reviews on its food exports seriously, instead of issuing papers to convince others of the good quality of its exports.
In spite of all these defensive stances, China has to be commended on the changes it has made so far.
According to Xinhua news agency, the Chinese government had last Friday approved the nomination of a 54-year-old Paris-trained scientist who is not a member of the Communist Party as the country's new health minister.
The previous head of China's food-and-drug administration has been sentenced to death for taking bribes which led to faulty medicines being sold.
The country should run well if it focuses on reforming itself internally instead of pointing fingers at external sources.
Otherwise, good luck for next year's Beijing Olympics.
Serene Lim
ArchivesAnd how true that idiom is for China's current predicament.
Just weeks after news on the China slave scandal exploded past Chinese shores, China's food exports, among other things, have come under scrutiny.
It all started with some pets in the US dying after having eaten some pet food containing Chinese-made wheat flour, which was contaminated with melamine. That prompted a massive recall on American pet food.
That was the beginning of a whole slew of export investigations.
Then came the discovery of a potentially toxic chemical in Chinese toothpaste exports – diethylene glycol, a substance used in anti-freeze.
US toymaker, RC2, also recalled “Thomas the Tank Engine” toy trains made in China after finding out the paint used on some of them contained lead.
At the beginning of last week, a New Jersey tire importer recalled 450,000 Chinese-made tires after a fatal accident, and finding out that those tires did not adhere to their safety standards.
End of the week saw the US Food and Drug Administration saying it will block the imports of Chinese farm-raised seafood due to concerns of contamination.
The European Union said last Friday that it will follow the lead of the FDA on seafood.
Japan has also stepped up the seafood scrutiny after finding an increase in the number of shipments of Chinese eels that did not meet Japanese safety standards.
Now China may be new to the public relations game, but if it does not take action on these issues soon, its drive up towards the 2008 Beijing Olympics could be heading down the drain.
You should be worried since the SGX-listed Chinese stocks you hold may be implicated in these export investigations.
Stocks like China Dairy, China Milk, China Food Industries, among others, will probably on the watch list.
There are a few things China should do to start controlling the damage.
First, it really should quit playing tit for tat.
China has recently announced rejecting US-imported food like orange pulp and dried apricots because they didn't meet its safety standards. This seems too much of a coincidence, doesn't it?
Second, it should take reviews on its food exports seriously, instead of issuing papers to convince others of the good quality of its exports.
In spite of all these defensive stances, China has to be commended on the changes it has made so far.
According to Xinhua news agency, the Chinese government had last Friday approved the nomination of a 54-year-old Paris-trained scientist who is not a member of the Communist Party as the country's new health minister.
The previous head of China's food-and-drug administration has been sentenced to death for taking bribes which led to faulty medicines being sold.
The country should run well if it focuses on reforming itself internally instead of pointing fingers at external sources.
Otherwise, good luck for next year's Beijing Olympics.
Serene Lim
Labels: china exports, european union, japan, seafood, US
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