Milk Crisis: The World is Watching,,,

Filed in archive News on September 30, 2008

A blog called Geostrategy brought this piece from the Australian's Sunday Business section to my attention. Their point is well taken: the world is paying attention to she how China handles the milk crisis.

An excerpt...

At least the current crisis in the dairy industry, from which some of China's bigger companies may never fully recover, serves to provide a clear-cut lesson to those who have argued for China's exceptionalism, claiming that the usual economic rules don't, or shouldn't, apply.

Shanghai-based marketing outfit Access Asia's newsletter says of the plight of New Zealand dairy giant Fonterra, 43 per cent owner of state-controlled Sanlu, the biggest culprit in the poisonings of thousands of babies: "We'd suggest that one reason this situation got so bad was that many of the executives involved had read several of those dreadful China business books that always say something like: 'Never, ever, under any circumstances, embarrass or openly confront your Chinese business partners as they will suffer loss of face, and this is absolutely the worst thing that can happen.

"We beg to differ....

The irony, as The Australian points out, is that China is more nationalistic now than before the crisis and there is little patients for those who suggest that China has something to learn about business.

The brand name of Made in China is at stake. It has obvious problems already. Will China's actions strengthen it? Or will they weaken it still further...?


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