There were/are some very nervous Chinese based multi national executives over the past 3 months. As the Chinese Tainted Milk Scandal evolved and it was discovered the problem was more wide spread than just the SANLU products, we had even more indication of the Opaque nature of the Chinese Government.
Source: (Peter Parks/AFP/Getty Images)
The Olympics were on and the government had ordered that there was to be no bad news during this period that would affect the Games. So this is where the nervousness comes in. I have been told that many senior executives were removed from Mainland China for their own safety during this period.
The companies felt there was a risk of their people being held by authorities to keep the story hidden. Well the story was buried for a number of weeks and who knows what damage and suffering this caused to poor helpless babies and children.
The story posted yesterday on the USNEWS web site by Paul Mooney gives a very good insight into the machinations and ramifications of this wide spread problem in China.
The scandal also raises the significant issue of Brand protection. Cadbury, Nestle and Unilever brands were all affected by the Melamine contamination and recalls internationally have been costly both financially but also to Brand Health.
Doing business in China is very different and negotiating with Central and Local Governments as well as with local partners is a very complicated business. The story was covered up and executives did flee China because they felt unsafe.
Why are we prepared to treat China differently? Is it because they scare us?
Tim
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