By DAVID MOON, Moon Capital Management
When Zheng Xiaoyu was head of China's
State Food and Drug Administration from 1998 to 2005, his agency approved six
medicines that ultimately proved to be fake. One of the counterfeit antibiotics
was responsible for the deaths of 10 people.
Add one more
to the list. Last week the Chinese government executed Xiaoyu for dereliction of
duty and accepting bribes. His top aide was also sentenced to death but given a
two-year reprieve, which will likely be commuted to life in prison if officials
decide he has been reformed.
In Japan, offenses like these are also
serious. When a farm outside Tokyo reported the country's first case of
bovine spongiform encephalopathy (mercifully, mad-cow
disease) in 2001, a government official resigned in apparent disgrace. This,
despite the fact there was no evidence that the official was responsible for
actually infecting the heifer with the disease.
But make a mistake like this in China
and they put you to death.
mistake the Chinese government as being overly concerned with the safety of its
food supply or the health of its citizens. This is the government that ran over
its citizens with tanks on live television. No, the Chinese a government is
concerned about its reputation in the world's trading markets.
1970s, I've been reading about the great profits that await U.S.
companies when Chinese markets finally open to the west. 'Yes, Coke sells a
bunch of cola now, but wait until a zillion Chinese begin drinking the stuff.'
decades later, we're still talking about that great untapped market in the
however, have a different idea. They look west and see customers, not suppliers.
Their expectation is to sell us things. They see the rest of the world as their
market, not the other way around.
former FDA official was a business decision. It's a way of saying, 'Hey
U.S., we're going to do everything
possible to make our products safe for consumption in your country. Want to buy
may not be among the noblest objects of desire, but it is a fantastic motivator.
Money is often blamed for many of the ills of society. But it seldom gets the
credit it deserves.
A few years
ago, do you think the state of South
Carolina suddenly became concerned about the
civil-rights implications of the Confederate battle flags flying all over the
state? Or might officials have decided to lower the flag from the state
capitol in response to a boycott of South Carolina's number one industry:
Wal-Mart recently announced a change in its policy toward youthful shoplifters.
Previously, the store wouldn't press charges against first-time shoplifters
younger than 18. The new limit is 16. Additionally, if the store calls the
parents of a child and the guardians don't show up at the store within 60
minutes, the store will call the police, regardless of age.
company is trying to make more money. It may have an impact on youth crime as a
course, not as much of an impact as would the government of China.
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).