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China’s food safety woes are well-known: Exposés have become all too common, especially after the 2008 scandal over melamine-tainted milk. From gutter oil to fake eggs to contaminated strawberries, the long list of food safety incidents in China means that domestic consumers are understandably worried about the food they can buy and eat. According to a Pew Global Attitudes survey, 71 percent of Chinese people considered food safety to be a big problem in 2015. Improving food safety in China is also important for international consumers because food and ingredients from China can be found on supermarket shelves all over the world.
Addressing food safety concerns can be seen part and parcel of China’s needed transition toward a consumer-oriented economy, which is even more imperative now that the country’s GDP growth is slowing from historic rates. Boosting consumer confidence is an essential piece of that puzzle for China—and by extension, a factor for global economic stability.
Revised law, renewed challenges
China’s revised Food Safety Law, enacted in October 2015, is intended to strengthen the regulation of food companies in China and enhance oversight along the supply chain. Like in other issue areas, however, the challenge is not in setting regulations but in implementing them. The food industry is a difficult one to oversee, and food safety regulators face a wide range of potential hazards—such as absorption of soil contaminants, illegal additives in the production process, and unethical business practices like selling fake or expired items. Chinese food safety regulators must also deal with a still-fragmented (and thus chaotic) domestic food industry. Bringing some semblance of order to the countless farms that supply supermarkets and food processing companies and to the approximately 35,000 food processing companies in China is a governance headache and will take time, but the challenge is not insurmountable.
[T]he challenge is not in setting regulations but in implementing them.
In fact, policymakers and consumers are already meeting this challenge head-on. China’s State Council has publicly stated that food safety is a top priority and that food producers and local governments will be held accountable if they fail to meet and enforce health and safety standards. The revised Food Safety Law covers more stages along the supply chain and, in direct response to the heartbreaking infant formula scandal, increases requirements governing the infant formula industry. Perhaps most important are the tougher consequences for violators of food safety regulations.
Tightened regulatory oversight and more severe penalties are crucial in the effort to increase consumers’ confidence in the health and safety of their food. Better inter-agency coordination is still needed, however. In addition to the China Food and Drug Administration, the General Administration for Quality Inspection and Quarantine, the Ministry of Agriculture, and the National Health and Family Planning Commission are also involved. Each has its own set of regulations related to food safety, which means that greater coordination and cooperation between the relevant agencies are necessary for the food safety regulatory system to function.
More regulatory requirements and additional inspections along the supply chain will raise the costs of doing business, thereby prompting industry consolidation, which should help make the domestic Chinese food industry more manageable from a regulatory perspective. Some of these additional costs will be passed on to consumers, so it will ultimately be up to them to demonstrate through their purchasing decisions that they are willing to pay more for food that they can trust is safe. The growth of a domestic organic food industry, community-supported agriculture, and white collar farming in peri-urban areas already suggests that there are consumers who are willing to pay more to be assured of the quality of their food supply.
Improving food safety, reducing the trust deficit
Improving food safety has implications beyond public health. Consumer anxiety about food stems as much from distrust of regulatory authorities as it is does from distrust of unscrupulous food producers. Pervasive rumors of government officials having access to special supply farms and widespread anecdotal accounts of farmers keeping separate plots of pesticide-free crops for personal consumption—while regular consumers can only buy food riddled with pesticides—reinforce a sense of distrust and inequality. This, on top of ongoing food safety scandals, contributes to a trust deficit in Chinese society—hence the imperative to improve the situation. Fewer instances of food safety violations and greater supply-chain transparency and product traceability would go a long way toward restoring consumer confidence in the food supply, as well as their trust in producers and regulators. This, in turn, will be essential to China’s efforts to build a robust consumer-oriented economy that can sustain a realistic level of growth—one that supports rather than jeopardizes global economic stability—in the long term.
For more on food safety issues in China, join the John L. Thornton China Center at Brookings for a public event on April 28.