Month: June 2007

A few weeks into China’s rippling food quality crisis a PR strategy is coming into view. It’s a classic one: blame everyone else. Unfortunately, it’s not likely to be all that effective because of two things. First, China does actually have long-standing problems with food and drug quality. Second, China’s poor history of transparency makes it hard for them to dispel suspicion (a problem that also dogs their disease-related communication).

The recent affair began with the discovery that vegetable protein shipped from China to the USA and used in pet food had been contaminated with melamine, a plastic that can make the overall protein level appear higher. Melamine also destroys the kidneys of cats, as it happens, so the contamination was discovered.

In classic fashion, China’s initial response was to deny everything. As a crisis PR strategy this sucked. Nothing makes you look sillier and less credible than retracting a categorical denial made in haste. It taints every following communication. In fact it wasn’t entirely China’s fault. Initially AQSIQ, China’s quality monitor, wasn’t looking for melamine, but another suspected contaminant. But obscure mitigating technical factors don’t tend to play well in the court of public opinion, or excuse prudence. In the face of further disclosure, the Chinese government’s subsequent choices were to appear dissembling or incompetent.

Every country has its fair share of food quality problems. In my native USA E. coli bacterial contaminations are something of a national sport, and I can remember plenty of food poisoning scandals. Eric Schlosser’s book, Fast Food Nation, makes fine reading if you are interested in the topic. The FDA conveniently puts its “refusal reports” –the reports of imports rejected– online. If you want to be horrified, read the Mexican list. Food contamination is not an exclusively Chinese problem.

China’s government has grabbed onto this idea as part of its defense. It has been helped by some recent developments, including the rejection of a shipment of Evian for alleged bacterial taint (a case that stokes the fire of another China PR issue, Danone’s legal war with Wahaha — see this interesting post from China Law Blog) and the discovery of Melamine in some US-manufactured animal feed ingredients. Li Yuanping, director general of the government’s Import and Export Food Safety Bureau, also pointed out that China has in the past rejected US products due to Salmonella contamination, and asserted that China’s record on food exports is slightly better than the United States. Li offered up some winning quotes:

“Ninety-nine percent is a relatively high percentage of suitable goods,” Li Yuanping, director general of the government’s Import and Export Food Safety Bureau, said at a news conference. “Facts speak more loudly than anything. . . . From what I have told you, you can see China has a very sound system that can guarantee the safety of food exported abroad.”

***

“No food-inspection system is foolproof,” he said. “It’s like an airplane. Flying is said to be the safest way to travel, but sometimes you have plane crashes.”

Bad choice of words in Imagethief’s opinion. You think an airline would communicate that way? But I haven’t been hired to advise the Chinese government.

Graceless rhetoric aside, Li might actually be right. But perception is everything. Frank Luntz, a conservative pollster, wrote a pretty good book about public communication called Words that Work in which he relentlessly drove home a key point: It isn’t what you say, it’s what people hear (in fact, that’s the subtitle). You say “99% are good”. Americans in bathed in relentless media coverage will hear, “1% might kill you”. Roll the dice and move your mice.

Like a premature categorical denial, “everyone else sucks too” is considered a weak strategy around our office. You think China’s national ambition is to suck only as hard as everyone else? I think they want to be better. More importantly, as far as the audience is concerned we’re not talking about everyone else. We’re talking about export-driven China, which has a great deal at stake in overseas perceptions of its food quality. In international trade, food and drug safety issues get entangled with every other hot button issue. And in the US right now China is second possibly only to Iraq as the hottest of hot-button countries.

To illustrate, let’s look at that Mexican example above. America simply doesn’t have as big an axe to grind about Mexican imports (except for immigrants) as it does about Chinese ones. Mexico isn’t the emerging strategic rival. Mexico doesn’t hold a trillion dollars worth of American debt. You don’t hear about America’s trade deficit with Mexico (about a quarter the size of the one with China in 2006). By and large, Mexico doesn’t threaten American agriculture so much as it props it up with cheap labor.

You get the idea.

Agenda hockey

Following the great melamine scandal of ’07 a few other China-linked disasters have emerged into public view. In early May the New York Times ran a lengthy investigative report on tainted cough syrup in Panama killing people. The cause was toxic, cheap ethylene glycol from China sold as harmless but more expensive glycerine and used in the manufacturing. The ethylene glycol has been getting around, apparently, as it has also found its way into Chinese toothpaste (proxy link) exported to Panama, the Dominican Republic, Costa Rica (and, for good measure, smuggled into Nicaragua) and, it has been discovered, the United States.

As far back as mid-May, Dave Barboza of the New York Times and International Herald Tribune was writing about China’s “credibility problem” surrounding food exports. The situation has not improved since then. Barboza points out that a thirty-billion dollar a year export business it at risk. And that’s where the agendas come into play. The Washington Post, among others, has run op-ed columns editorializing about Chinese food imports in pretty strong terms. Here’s a recent lede:

And what is madame’s dining preference this evening? Scallops coated with putrefying bacteria? Or mushrooms laced with illegal pesticides?

These delicacies and more were among the hundred-plus foods from China that our Food and Drug Administration detained at U.S. ports last month, Rick Weiss reported in Sunday’s Post. Detained and sent back to the importers, who ofttimes sent them back to us again.

Yuck. The Rick Weiss story linked to in that op-ed piece is headlined “Tainted Chinese imports common”. That’ll stick in people’s heads.

China is busy trying to persuade the United States to allow imports of Chinese frozen chicken, among other things. What stories do you think American chicken farming companies are busy reminding Congress of right now? The Boston Globe, which is not much of a China cheerleader (they regularly run op-ed pieces on China and Darfur and have played a big role in the “Genocide Olympics” campaign), was running gross-out stories on Chinese chicken farming way back in early May, before this whole episode even kicked into high gear. More recently, the American press has been reminding everyone that their vitamins all come from China. That story was by McClatchy’s Tim Johnson, who also wrote an interesting post about this on his blog. Check it out to see some interesting public reaction.

So the picture that is emerging is of a food and drug supervision apparatus that is hopelessly broken and that has been for some time. This will be no surprise to anyone who lives in China, where food scandals fall from the skies like the Shanghai plum rains. But it’s making waves overseas now, with enormous business implications. You might think that a serious, soul-searching look at the state of domestic regulation and enforcement, vigorously communicated, would be China’s solution.

You would be wrong.

The blame game

China certainly takes the situation seriously. In fact, seriously enough that English-language state media in China, in the form of the China Daily, excoriated China’s regulators for their crappy communication (here reported on by the AP). That is significant. In fact, suggesting something of an editorial slant, the China Daily also went so far as to publish a Wall Street Journal story titled “China confronts crisis over food safety” in its entirety on the China Daily website, with attribution and an external link.

The popular Southern Metropolis Daily also ran a column by journalist and blogger Lian Yue, translated by Danwei, that linked the food safety problem to broader problems in China. I don’t know if similar commentaries ran elsewhere in Chinese language media. Anyone who has seen anything should post a comment.

But the official response from the government, represented largely by AQSIQ, has been essentially to blame anyone and anything but the system.

In the case of the Panamanian cough syrup, the deputy head of AQSIQ blamed Panamanian traders, an account disputed elsewhere. In the case of the tainted toothpaste, China is accusing the American FDA of sensationalizing the situation. In that same story the head of AQSIQ’s food safety division accused the foreign media of the same thing, describing their reporting on the scandals, in an exquisite choice of words, as “wanton”.

The charge of media sensationalism may be justified to a degree, but blaming the media is almost never an effective PR strategy. It carries an inescapable whiff of Scooby-Doo, as in, “I would have got away with too, if wasn’t those meddling kid reporters!”

Finally, the Chinese government is blaming its former drug chief, Zheng Xiaoyu, for the entire situation (interestingly, a Google search for his name this morning causes Nanny to issue the deadly “server reset” message). The unlinkable South China Morning Post drove the point home with a headline last Friday that read, “Corrupt drug chief blamed for scandals.” AQSIQ and the State Food and Drug Administration (SFDA) double-teamed on this one:

SFDA spokeswoman Yan Jiangying said the agency should not be blamed for Zheng’s mistakes. “I want to highlight that we should not dismiss the entire drug supervisions system because of a single person, Zheng Xiaoyu, and we should not extend the mistakes made by a single person, Zheng Xiaoyu, to the mistakes of the entire system,” she said.

So its Zheng Xiaoyu’s fault if you had any trouble reading between the lines. And people say the Chinese are cryptic.

When China rolls somebody’s head over a scandal it’s not always a metaphor. To show how serious it is about that accusation, Beijing has sentenced the hapless Zheng to death. It has been a long fall for the man who was tasked with cleaning up in the wake of the awful Anhui baby formula scandal of 2004.

Killing the wrong chicken

Let’s go back to Frank Luntz’ point about it not being what you say but what people hear. Executions have a proud tradition as public communication. China thinks that the message that they are sending  with Zheng’s sentence is, “We are goddamn serious about this.” Imagethief is willing to bet that the signal received by overseas audiences will be, “We are so thoroughly corrupt that we had to execute our former top drug regulator.” The question going through heads overseas will be, “Well, whom haven’t they caught yet?”

Executing a mandarin probably won’t have any effect at all on the small processors and exporters who seem to be responsible for most of the problems. Zheng is too far removed from them. Unless small companies feel the weight of enforcement landing squarely on their own shoulders, with an attendant shift in the overall risk/reward equation, their behavior won’t change.

The lingering question is whether a combination of endemic corruption and industry fragmentation render the problem unsolvable. An Imagethief commenter named Jim recently made a good point. He wrote:

Processing millions of tons of food, through millions of workers in tens of thousands of large and small companies, with high cost-cutting motivations, from millions of farms through thousands of transportation companies to millions of sellers to tens of millions of buyers, is hard.

Yes, it is. But I’m an optimist and China needs to show that it is serious about regulating that very process and enforcing vigorously if they want to get past this episode. And they need to clearly communicate exactly what they are doing to both domestic and overseas audiences. Good crisis PR isn’t about bluffing your way past a real problem, it’s about explaining what you are doing to solve it. No one will expect China’s food problems to be fixed quickly, but people can be pretty forgiving in the face of some contrition and obvious effort.

The other option is to keep pointing fingers elsewhere. That might save face and keep people at home happy, but it won’t influence overseas audiences who will keep hearing in the most visceral terms possible how broken China’s regulatory system is. Doors will slam on Chinese imports. Overseas manufacturers conscious of their own brands will look elsewhere for ingredients. And the Chinese government will look foolish and self destructive when the next scandal boils out of the bowels of a broken system.