Keeping the Mystery Out of China’s Meat

When the yellow liquid in a test tube containing tiny pieces of string beans turns clear, Chloe Fan knows why. A nearby computer screen quickly confirms her suspicion: Pesticide levels in the sample are twice as high as accepted standards. Fan, a Wal-Mart Stores (WMT) food scientist in Guangzhou, runs another test, then has the shipment of beans pulled, stopping a batch of chemical-laced vegetables from reaching customers at the retailer’s stores in China. Hers is a job that can’t be taken for granted. “China has food safety rules,” says Fan, 24, clad in a white laboratory coat and surrounded by beakers and test tubes, “but not all suppliers in China understand and follow them.”

A seemingly endless string of scandals—from melamine-tainted milk that killed six infants and sickened 300,000 others in 2008 to rat meat recently sold as mutton—has made China the Wild West of food safety. Inadequate government oversight also is forcing big Western companies, from Wal-Mart to Nestlé (NESN:VX) to French supermarket operator Carrefour (CA:FP), to put on their sheriff’s hats and take food policing into their own hands.

Ironically, China’s food safety standards are comparable with those in developed countries such as the U.S. and are often stricter, says Chen Junshi, senior research professor at the China National Centre for Food Safety Risk Assessment. But he says problems arise because of a lack of laws to ensure foods are safe early on—at the grower level or during the production cycle—before they are sold.

Producers in China are only encouraged, rather than required, to adopt global compliance standards in their manufacturing process.

Economics are often behind such food quality lapses.

China has too many tiny food businesses for the government to effectively police, and the lack of education among farmers and processors often results in food safety lapses, according to the World Health Organization. There are 500,000 food production and processing companies in China, and about 70 percent of them have fewer than 10 employees, according to market researcher Mintel Group. This compares with 30,000 such companies in the U.S. Estimates peg the number of Chinese inspectors at just one for every 420 farming households.

China was the sixth-largest exporter of food to the U.S. last year, supplying more than two-thirds of the tilapia and apple juice and about half the cod that Americans consume. Chinese food imports increased by about 250 million pounds, or about 7 percent, from 2008 to 2012, according to the U.S. Department of Agriculture. Greater exposure to China’s less-regulated suppliers comes with risks: In the last four years, FDA inspections in China have uncovered cases of dried octopus and raw scallops containing salmonella, jelly beans and gum drops laced with lead, and a producer in Fujian province misdeclaring potentially poisonous puffer fish as monkfish.

The FDA plans to expand its two-man team of food inspectors in China to nine over the next 18 months as the number of food exports to the U.S. grows.

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