Saving Face or Saving Lives? In China, It's Wrong Only If You Get Caught

By Stephen A. Nelson

Wednesday, Aug 22, 2007

Although it's not part of China, Taiwan has a vested interest in China's tainted toy troubles -- partly because Taiwan is one of the biggest investors in China, and China is Taiwan's biggest market. So "when China sneezes, Taiwan catches SARS."

But Taiwan is also an interested party because its own manufacturers have shown the same "Chinese" attitude toward labour laws and environmental laws: It's wrong only if you get caught. Or as a prominent Taipei lawyer once told me, "Rule of law is a foreign concept in Chinese society."

Taiwan has a history as a place for "outsourced" manufacturing of everything from microchips to Barbie dolls.

People in Taiwan know that big U.S. companies such as Mattel were getting their products made in Taiwan long before they were sending their production lines to China.

The reasons were simple: In the 1980s and 1990s, cheap labour, few labour laws and even fewer environmental laws were the hallmarks of a third-world dictatorship hell-bent on economic development.

And when Taiwan's fledgling democracy started to implement even minimal labour and environmental protections, those same big companies moved their production elsewhere: places like Vietnam and China. Places where labour and environmental laws -- when they exist -- are hardly ever enforced.

Disposable labour and a disposable environment are the very reasons why manufacturers set up in China. And China, hell-bent on economic development, welcomes them with open arms.

That's why China is poisoning its own people even as it produces toxic products for "foreign" consumption.

The Chinese response to being caught out is the same as in Taiwan: Blame someone, then get back to business as usual.

Inside the country, the impulse is to find the scapegoat and blame him. Make him pay. And in a society where guanxi (relationships/connections) is everything, the pressure for "heads to roll" can take a very dark and perverse turn.

That's why Zhang Shuhong (張樹鴻) -- co-owner of Lee Der (the Chinese supplier making tainted toys) -- ended up hanging himself.

To the rest of the world, the reaction is to blame the outsiders: "Don't blame us. Blame the foreigners. It's not up to us to enforce foreign standards. It's up to the foreign companies."

In short, the whole thing is a foreign problem.

Neither of these responses is particularly sane. Neither will save the environment or save consumers from potentially lethal products.

But they will, in Chinese eyes, save face. So if manufacturers, consumers, environmentalists and governments really want to protect themselves, we have to make it a matter of honour. And we have to make it clear to China that it will no longer be "business as usual."

All of us have to make the Chinese understand that the only way to restore their reputation (and their profits) is to stop blaming and start taking responsibility; stop treating safety standards as something "foreign" and start treating them as something essential to the future of China and the Chinese.

And here is where Taiwan could show leadership.

Taiwan could show the world that it is possible to stand up to Beijing and yet still do business with China. In fact, it could show the world that standing up to Beijing is essential to doing business with China.

The question is: Will Taiwan do it, or will it back down because it doesn't want to be accused of throwing stones while living in a glass house?