What China’s new food safety law might mean for consumers and businesses

Food safety is not a problem unique to China, though it is certainly one of the country’s most pressing and persistent challenges. On April 28, 2016, the John L. Thornton China Center hosted a public event to discuss food safety in China and what new regulations might mean for consumers and businesses.

Revised food safety law a step in the right direction

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. The law imposes tougher consequences on violators of food safety regulations. The revised Food Safety Law is a step in the right direction, but improving food safety will require more than just new regulations. Greater inter-agency coordination is needed among the various government entities with regulatory responsibility for food safety, including the China Food and Drug Administration, the Ministry of Agriculture, the National Health and Planning Commission, and the General Administration of Quality Supervision, Inspection and Quarantine.

China has done relatively better in enforcing food safety and quality standards for its food exports than it has for its domestic food market. A disparity between export quality and what is found in local markets is not uncommon in developing countries. But after several large-scale food safety incidents, domestic Chinese consumers are now paying close attention to the quality of their food and are no longer willing to accept such a disparity. Setting and enforcing higher food safety standards domestically is important for maintaining public health and for increasing consumer confidence. The latter will take time but is an indispensable component of the consumption-driven economy that China seeks.

Industry consolidation needed

One of the biggest obstacles facing Chinese food safety regulators is a still-fragmented domestic food industry with many small players. The increase in regulatory requirements and inspections mandated by the new law will raise the costs of doing business and likely lead to industry consolidation, which would help make the domestic Chinese food industry more manageable from a regulatory perspective. Emerging trends that see consumers buying food products from small and perhaps unverified retailers online actually make the jobs of regulators more difficult. This is because products are harder to trace—and, if there is a problem, to recall—when transactions occur through nontraditional retail channels. Traceability is critical to ensuring food safety because it allows problematic food items to be identified. The responsible firm can then correct the situation and each actor in the supply chain can be held accountable.

The Chinese government is already supporting initiatives that aggregate production units at the farm level. These farmer production bases enable farmers to coordinate food production and marketing to larger retailers. Participating farms have been provided with safe pesticides and guidelines on pesticide application; they are also able to sell to large retailers directly. These direct farmer-retailer relationships allow for greater traceability and facilitate the spot-checking that is necessary for verification. This model holds promise for improving food safety, especially as it pertains to pesticide application, but it will need to be scaled up to have a meaningful impact on China’s domestic food market.

What can China learn from other countries?

Since China is not alone in facing food safety challenges, it can learn lessons from the experiences of other countries. According to Vivian Hoffmann of the International Food Policy Research Institute, “there are many ways in which the public sector can harness the capacity and energy of the private sector to make food safety regulation more efficient.” For instance, China could consider greater co-regulation, which is a strategy that involves the private sector in regulation. Allowing firms to give input when regulators are setting standards can help prevent situations where unattainable standards are either crippling for companies or just ignored altogether. Hoffman is clear to note that allowing firms to give input does not mean compromising on consumer safety. Rather, it would create a more transparent process that would allow companies time to work up to higher standards if necessary. Private companies could be involved in testing their own products, but verification testing would still be needed.

Open communication with consumers is also important. The risk-based approach to food safety, which is the international norm and which China has also adopted, entails a particular challenge: Sometimes what consumers think is the most dangerous aspect of the food supply is different from scientists’ perceptions and knowledge of risk. For example, scientists may focus on biological contaminants while consumers worry about pesticides and additives. The concerns of consumers should be taken into account when setting priorities, but experts also need to explain why their concerns may be different. Communication and transparency are essential for bridging this disconnect. Chenglin Liu of St. Mary’s School of Law similarly stresses transparency as a key ingredient in improving China’s food safety situation. Broader capacity building efforts—as it relates to rule of law, an independent judiciary, and independent journalism—will help improve the enforcement of regulations.

The country’s revised Food Safety Law is a step in the right direction, but it is not enough to resolve China’s food safety woes. Regulatory enforcement remains a challenge. Fortunately, it is by no means an insurmountable one. Vigilant consumers will continue to demand higher-quality and more-traceable food products, a trend that puts increasing pressure on regulators to enforce high standards and that also presents great opportunities for proactive businesses.