Chinese Firms Accused of Dashing Safety Rules

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Defective tires are the latest product manufactured in China to have trouble with regulators. John Frisbie, president of the U.S.-China Business Council, says Chinese companies are not adhering to international safety standards. Frisbie talks about whether recent bad news has changed American business interests in China with Steve Inkseep.

STEVE INSKEEP, host:

Chinese product quality is of interest to John Frisbie. He's head of the U.S.-China Business Council and we invited him over after the recall of Chinese pet food, and toothpaste, and toys, and more.

Mr. JOHN FRISBIE (President, U.S.-China Business Council): I think what you have in China is still a weak enforcement of laws that are on the books. In many cases you will see they might have product standards that are fine, that can meet international norms, but the breakdown often occurs particularly in Chinese companies that might not adhere to those standards, and the product gets out from China to us.

INSKEEP: Do all of these incidents, one after the other, about unsafe products from China, add up to a serious public relations problem for U.S.-China trade?

Mr. FRISBIE: I think it's very important that we work with the Chinese government to get on top of this issue quickly. I think it's not just an issue for China either. We need to make sure we're doing this with all of our trading partners as well as here in the United States too, to make sure that consumers can have confidence in the system.

INSKEEP: Has there been any instance of domestic manufacturers taking advantage of this? Look, my product is made of the United States, under regulations that are actually followed, and you know, I have an edge here over the people who import from China.

Mr. FRISBIE: I haven't seen that, but you're making a good point, and that is regardless of what the government may do, and regardless of what might be able to do on inspections or other things to ensure that products are safe, there's the tough lesson of the marketplace that's going to go on here. And if producers in China are not living up to standards or producers anywhere else, you know, I think that the marketplace will in turn teach them that it's important to make sure they're living up to those standards.

INSKEEP: And would that affect at some level the decisions of American companies about where to buy their products?

Mr. FRISBIE: U.S. companies, I think, are usually pretty good, particularly if they have their own facilities in China, in ensuring that the products meet international standards. If they're sourcing from other suppliers, I think all of the attention that's being placed on this issue is probably going to make them take extra measures to ensure that their products are safe. And I think that's a good thing.

INSKEEP: What are American companies doing, if anything, to try to clean up this issue, if it adds up to a major issue, one incident after another here?

Mr. FRISBIE: I think it's important to keep in mind that U.S. companies, something like three-fourths of American companies that invest in China, own their facility there 100 percent. And they bring with them their international standards and their quality control. That's not where the issue is. The issue by and large is in Chinese companies or maybe some companies of other investors in China that maybe aren't adhering to those product safety standards.

INSKEEP: How helpful is the Chinese government here?

Mr. FRISBIE: I think they will be helpful. And we have a lot more allies in China on this issue than we have bad actors. And by that I mean Chinese consumers, for example, have their own concerns about product safety. You might recall that three or four years ago, I think it was, there was some baby milk powder that had been tainted by a bad ingredient, leading to the deaths of some infants over there. And consumers there reacted very strongly to that. The Chinese central government, I think, has concerns about this because obviously there's a reputation issue here, at least.

And the third thing to keep in mind is that there's a lot of legitimate producers in China - most of them are legitimate producers - who are also going to be tainted by the bad practices of a few bad actors. And the marketplace is going to teach a tough lesson here.

INSKEEP: What's the danger here to the business relationship?

Mr. FRISBIE: I think the danger is that there could be some kind of reaction that says all product from China is bad. I think that's just not the case.

INSKEEP: Are there people in the business world saying, we'd better get a handle on this because otherwise Congress is going to come in and pass some law and we may not like it?

Mr. FRISBIE: I haven't heard that. I think businesses feel like it's very important to make sure that the supply chain is safe and that businesses on their own make sure we have a system in place that will catch the bad product.

INSKEEP: Well, John Frisbie, thanks very much.

Mr. FRISBIE: Thank you.

INSKEEP: John Frisbie is president of the U.S.-China Business Council.

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