“These after-the-fact administrative measures miss the point. Regulatory regimes succeed when systemic incentives make market participants behave. These incentives can exist only after separation of the Government from control of prices, company management and information flows.”
Arthur Kroeber of the prestigious China Economic Quarterly points at the responsibility of the Communist Party in the ongoing milk scandal. Kroeber explains that arresting the people who have been appointed by the Party is not going to work, in the Australian, but also in many other media.
“This food-safety disaster underscores the profound deficiencies of Chinese regulatory regimes, which are intrinsic to the authoritarian political system.”Sanlu’s chairwoman was appointed by the Communist Party in Hebei province, and city officials in Shijiazhuang, where the company is headquartered, appear to have been complicit in suppressing news about the problem. The Government is responding by arresting officials and tightening inspections.
Arthur Kroeber is part of the China Speakers Bureau. If you are interested in having him, or one of our other leading speakers, as an expert, do let us know.