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Why Wal-Mart dares to sell diseased pork in China

(People's Daily Online)

08:56, July 12, 2012

Sweet oranges can deteriorate into sour ones due to different climates after they are transplanted from southern to northern regions. Certain world-famous brands recently suffered similar embarrassment in China.

Wal-Mart, which has long remained high on the Fortune magazine’s Fortune 500 list, was found in January to be selling pork sourced from diseased pigs in Dazhou, Sichuan province, and did not begin internal rectification until half a year later. Evian, a luxury and expensive French brand of bottled water, is often blacklisted by China’s entry-exit inspection and quarantine administrations due to substandard quality.

For a long time, Chinese consumers have had the impression that all products of foreign world-famous companies are "good stuff" and "of high quality", and are expensive for a reason. Why have they become "repeat offenders" in China? A popular photo on the Chinese Internet may explain a lot. The photo depicts two foreigners sitting by the roadside and littering melon-seed shells. The photographer said that when accused of littering, the two foreigners shrugged and said, "Come on, this is in China!"

Environment has great influence on companies’ behavior. All companies pursue profits, and will naturally be careful with their behavior if product quality problems can lead to hefty fines, tarnished image, loss of market share, and finally reduced profits. The real situation in China is that sales of Evian mineral water in the country have been growing in the past six years, though the brand has been exposed to quality problems more than 20 times. Wal-Mart has also seen revenue growth in China, though it has been repeatedly accused of cheating on prices or selling products of inferior quality. They will not have the motivation to improve their attitudes if it continues like this.

It is unrealistic to expect foreign companies to consciously sell products of the same quality inside and outside China. The Chinese government should act actively to create an effective incentive and restraint mechanism, so as to encourage and intimidate foreign companies to behave well in China.

For instance, relevant laws and regulations should be improved as soon as possible, and the punishment for product quality violations should be enhanced. A foreign consumer can receive hefty compensation for a defective product, while a Chinese consumer may only get a free repair. The foreign company may attribute the different treatments to the differences in Chinese and foreign laws. Due to the lack of legal basis, domestic law enforcement agencies can do nothing but watch Chinese consumers being treated unfairly. Only harsher punishments for product quality violations will intimidate domestic and foreign companies into paying enough attention to product safety and quality.

Furthermore, law enforcement agencies must treat domestic and foreign companies equally strictly. Certain local governments attach great importance to attracting foreign capital, but fail to pay due attention to quality supervision. A few local governments feel honored to attract foreign investment, and simply think that foreign-funded companies will have no quality issues and thus do not need prudential regulation or supervision. However, dealing with foreign investment is just like parenting. Parents will spoil their children if they say "yes" to every request of their children, and always forgive children’s mistakes easily.

Domestic consumers should not hold blind faith in foreign brands, and should enhance their self-protection awareness. They should file complaints and "vote with their feet" if the product they bought has quality problems, no matter whether it was produced by a Chinese or foreign company. Companies will behave well if law violations mean loss of market share.

May foreign companies treat Chinese consumers fairly!

Read the Chinese version: 沃尔玛为何卖病死猪肉?

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