How China Could Resolve Its Growing Consumer Crisis

Empty milk shelves in China (Courtesy of Wikimedia Commons)
One after another bad news came thick and fast for the middle kingdom. And then some more.

First up were the contaminated pet food which caused the deaths of many precious pooches and kitties in the West. Next were the dangerous levels of lead found in the paint of toys manufactured in China. Major toy makers like Mattel were literally caught with their pants down and they had to take quick action.

Of course, everybody's imagination was caught when cute as a button Lin Miaoke sang like an angel during the recent Beijing Olympics Games in August. Unfortunately, that turned into a nightmare when it was discovered that another cute but perhaps less beauteous child Yang Peiyi was the voice behind the singing.

The icing which took the cake is literally in the icing - or rather the melamine tainted milk in the icing. This was probably the biggest blow to China's reputation as the world's manufacturing hub. More than 54,000 babies and toddlers were sickened, with four deaths, by the dastardly deed by a major Chinese milk factory. As if that's not bad enough, the very same melamine is now found in eggs! What's especially bad in both instances is that the disclosure only came after somebody else detected it.

Could the Chinese authorities have done more to prevent this snowballing crisis of confidence? Yes, I believe so. Here are my thoughts

First, they could have been faster with the truth and to reveal it themselves rather than wait for somebody else to burst the bubble. With hundreds of millions of Chinese online, you cannot expect people to just shut up and endure what has been burning in their hearts and minds. It is better to be early with the bad news and get over and done with it, rather than wait until it festers.

Next, they should have been more open with the extent of the problems. Transparency and honesty works in a crisis situation. Trying to fudge it or hide it just doesn't cut it in the age of online-enabled openness.

One also needs to also put one's actions where one's mouth is. It is heartening to hear the Chinese leadership proclaiming that they will take firm action against the perpetuators. However, it isn't enough. What China needs to do now is to do a massive clean up exercise and embark on its own investigations of the entire food supply chain. And to do it quickly. Johnson & Johnson did it with Tylenol and it has paid off in the end.

It is also important to pay attention to the groundswell of public opinion. With the prevalence of social media platforms like blogs, forums, bulletin boards and internet messaging, the millions of ordinary Chinese citizens are now the media. They are empowered as citizen journalists, each with their own independent (and often strong) views, opinions and thoughts. Ignore the blogosphere at your own peril!

Finally, China needs to think less of saving face and more of saving lives (and its reputation). It is better to eat humble pie now, cry a little and be truly remorseful early rather than late. Say you are sorry from the onset, and perform an extraordinary feat of public good and win back that lost confidence. It was a real pity that they didn't include Yang Peiyi in the closing ceremony of the Olympic games because that would have been a major coup.

What do you think about China's efforts to curb its consumer crisis?

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