Made in China: to buy or not to buy?

What’s wrong with China? Pet food sickened dogs and cats, then warnings about toothpaste, toy trains, car tires and several types of fish came.

The warnings had one thing in common - all of the products came from China. And that has people worried.

"I'm scared to death. We are dependent on our government inspecting things," said Joyce Simple, a church secretary, interviewed on a recent shopping trip to a Wal-Mart in Houston. "I would be careful of anything that came from China."

For Emily Pokora, a 24-year-old law school student in Phoenix, the problem hit even closer to home. Her cat got violently sick in March after eating tainted pet food. While the cat survived, the episode has shaken Pokora's faith in the products she buys.

"You go to the store and you can't trust anymore that it's not going to kill your animal or hurt you," she said.

The string of recalls has not gone unnoticed by shoppers, based on Associated Press interviews around the country.

"Here we're buying all of these products from China and they're not adhering to our standards. It's very disturbing," said Joanne Metler, a community college teacher in Chicago.

The food and safety issues are one more irritant in a trade relationship already strained by a ballooning U.S. deficit with China. That deficit hit $233 billion (EUR171 billion) last year, the highest ever recorded with a single country. Imports of Chinese products into the United States totaled $288 billion (EUR211 billion) while U.S. exports to China totaled $55 billion (EUR40 billion). That means for every $1 (73 euro cents) in goods the United States sells China, China sells the United States more than $5 (EUR3.67) in products.

Chinese exports to the United States last year were nearly triple the level of just five years ago. The flood of Chinese products has increased since China's entry into the World Trade Organization in late 2001, a development which removed many of the remaining U.S. barriers.

China is now the dominant supplier in a whole range of areas that go far beyond the athletic shoes and low-priced clothing that have traditionally displayed the Made in China label.

Meanwhile, Cao Wenzhuang, a former department head at China's drug regulation agency, was sentenced to death Friday on bribery charges. A department director at the State Food and Drug Administration, he was given the death sentence with a two-year reprieve on charges of accepting bribes and neglecting official duties, said his lawyer, Gao Zicheng.

Cao, who oversaw the pharmaceutical registration department, had been secretary to Zheng Xiaoyu, the head of the agency, in the 1980s. Zheng was sentenced to death in May for taking bribes to approve substandard medicines, including an antibiotic blamed for at least 10 deaths.

In the pharmaceuticals department, Cao, 45, had the power to approve pharmaceutical production in China from 2002 to 2006.

Of the toys sold in America, 80 percent are produced in China. China has become the top foreign source of tires in the United States with imports from all countries accounting for about 40 percent of the U.S. market last year. China is now the world's leading supplier of seafood, shipping $1.9 billion (Ђ1.4 billion) worth of fish and shellfish to the United States last year, making it the third biggest foreign supplier in the U.S. market.

The increase in imports, however, has been accompanied by rising numbers of defects being discovered. The number of Chinese-made products that are being recalled in the United States has doubled in the last five years. Chinese imports accounted for more than 60 percent of the recalls announced by the Consumer Product Safety Commission this year and all of the 24 toy recalls.

"The government of China is struggling to enforce the limited standards they have given the hundreds of thousands of Chinese firms in the export business," said Nicholas Lardy, a China expert at the Peterson Institute, a Washington think tank.

Chinese officials, while accusing the media of hyping the problems, have moved to show they are taking the concerns seriously. China announced last week that it had closed down 180 food manufacturers who were found to have used industrial chemicals and additives in their products.

Donald Mays, senior director for product safety for Consumer Reports magazine, said that many of the problems in China feature an element of unethical business practices.

"Pressure from the importers to keep prices low can sometimes force the factories to cut corners," Mays said. "That could mean leaving out a key safety feature."

One of the toy recalls involved 1.5 million of the popular Thomas & Friends trains because the toys had been coated at a factory in China with lead paint, which can damage brain cells, especially in children.

The government ordered Foreign Tire Sales of Union, New Jersey, to recall 450,000 tires after the company notified regulators that some of the Chinese-made tires were missing a safety feature that keeps the tire tread from separating. The Chinese company denied the accusation.

The pet food products had been found to contain Chinese wheat flour spiked with the chemical melamine to make it appear like more expensive, protein-rich ingredients, while the Chinese-made toothpaste was found to contain an ingredient often used in antifreeze. The Food and Drug Administration on June 28 placed restrictions on imports of Chinese shrimp, catfish, eel, basa and dace after finding residues of drugs the FDA does not allow in fish.

And on Thursday, the Consumer Product Safety Commission announced the recall of Chinese-made jewelry that the agency said could cause led poisoning and a magnetic building set and plastic castles with small parts that CPSC said could choke children.

These problems have caught the attention of Congress, with members already highly critical of what they see as unfair trade practices they contend have pushed the deficits higher and contributed to the loss of 3 million U.S. manufacturing jobs since 2000.

"Tires, toys, toothpaste, pet food, fish - day after day and product after product, evidence of lax product regulation in China and inadequate import security in the U.S. mounts," said Democratic Sen. Sherrod Brown, a frequent critic of China.

"There's no question that too many Chinese manufacturers and food producers put the bottom line ahead of safety," said Democratic Sen. Charles Schumer. "The fact that every week we have to frantically pull Chinese goods off store shelves shows that our safeguards are failing."

Schumer called for creation of an import czar in the Commerce Department to better coordinate import inspections being done across a range of agencies.

Critics also have complained about budget cuts during the Bush administration that have left various federal regulatory agencies stretched thin. But industry groups said much of the impetus for cracking down on abuses will come from individual companies concerned about protecting their reputation with the public.

"Any time this happens, we go back to the table to see what we can do to improve our system," said Carter Keithley, president of the Toy Industry Association, which represents American toy companies. He said his group has been holding seminars in China for the past 11 years to teach companies there how to make toys more safely.

Many shoppers in the AP interviews said they still planned to buy Chinese products because of the low prices.

"There's always a trade off - quality versus cost," said Panneer Gangatharan, a 31-year-old software consultant in Pasadena, California. "I'm not sure how feasible it is for the United States to do anything about it, because the volume of products we're buying from overseas is huge."

Economists say it is unlikely that the current uproar over Chinese goods will make a dent in the flood of imports from that country or America's trade deficit with China.

"Ultimately, the U.S. consumer is attracted to cheap Chinese goods. As long as they keep the price low, U.S. consumers will keep buying," said Mark Zandi, chief economist at Moody's

Many analysts believe the U.S. deficit with China will keep rising until China starts heeding the Bush administration's suggestions to overhaul its economy so growth is based more on domestic demand and less on exports. The administration, led by Treasury Secretary Henry Paulson, is conducting high-level talks aimed at getting the Chinese government to make changes such as revaluing its currency to deal with the huge trade imbalance.

But even if that occurs, analysts do not expect any significant improvement for several years.

"There is so much momentum behind our deficit with China that I don't think it will turn around very quickly," said David Wyss, chief economist at Standard & Poor's in New York.

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