For further proof that punishment alone is not sufficient to deter graft and corruption inside China, consider this story from the Wall Street Journal (registration required) that reports on the latest resignation to result from a Chinese supply quality issue. In the article, the Journal reports that "China's chief quality regulator has resigned … amid a toxic milk scandal that has killed at least three children and sickened nearly 53,000." For those who've followed Chinese product quality scares in the past, this type of response should come as no surprise. The next act in the play will probably be just as familiar -- those tied to the scandal will commit suicide, be imprisoned or sent to the firing squad (a punishment equally as popular in Texas as in China). But as history has shown, legal retribution in the form of 40 caliber slugs is no deterrent in China when it comes to party-sanctioned supplier substitution and quality issues (I say party-sanctioned because there's no way that this behavior would have been allowed without payoffs to local and/or national officials). The same story repeats itself year after year. What really needs to happen in China is a crisis -- such as this -- that causes an ethical awakening on behalf of the people of the People's Republic that criminal supplier activity is everyone's concern. Until then, no one will be safe from a business culture that places manufacturing profits above ethics and basic human decency.
- Jason Busch