SHANGHAI: MILK NOT DOING THE BODY POLITIC ANY GOOD

C O N F I D E N T I A L SHANGHAI 000513 STATE FOR EAP/CM AND DRL NSC FOR LOI E.O. 12958: DECL: 11/25/2033 TAGS: PGOV PHUM SOCI ECON EAGR CH SUBJECT: SHANGHAI: MILK NOT DOING THE BODY POLITIC ANY GOOD REF: A. (A) SHANGHAI 498 ¶B. (B) SHANGHAI 427 CLASSIFIED BY: CHRISTOPHER BEEDE, POL/ECON CHIEF, US CONSULATE SHANGHAI, DEPARTMENT OF STATE. REASON: 1.4 (b),(d) Summary -------------- ¶1. (C) Public reaction to the recent milk scandal remains muted in Shanghai even as local stores have faced difficulties stocking an adequate supply of imported milk. Observers say Shanghai residents are angry about the food safety lapse, but the situation has not led to social instability in large part because people feel powerless to do anything. Shanghai legal scholars told Poloff that Chinese laws also offer little support to victims of the scandal, as local governments still reserve the right to block class action lawsuits. End Summary. Public Reaction Remains Muted -------------- ¶2. (C) More imported milk has appeared on Shanghai store shelves in the past ten days as the market recovers from a reported supply and demand problem that caused shortages of imported milk earlier in the month (Ref A). Despite the market fluctuations, Shanghai public reaction to the milk scandal -- nearly three months after Chinese media first reported cases of dairy products contaminated by melamine -- remains muted with no incidents of social instability or reports of political casualties (see also Ref B). Local residents appear to have returned to drinking Chinese brands of milk. Angry but Feeling Powerless -------------- ¶3. (C) Observers said Shanghai residents are angry about the food safety lapse despite the appearance of relative calm. Lu Hanlong, Director of the Sociology Department at the Shanghai Academy of Social Sciences, said food safety remains a "big social problem" in East China, and affluent consumers are paying more attention to food safety concerns by closely reading the packaging of food before purchasing it. Shanghai consumers, however, primarily view the milk scandal as a "northern" problem since Sanlu, the main culprit, is based in Hebei Province, Lu said, so the public's anger has not resulted in a major political or social impact. Consumers also apparently continue to trust official pronouncements by the local government; for example, one Shanghai resident told Poloff she began to buy Guangming (Bright Dairy) products again as soon as they were declared "safe" in early October. ¶4. (C) Another reason the milk scandal has not led to social instability in Shanghai is people feel powerless to do anything. Everyone knows there is no social justice, said Zhang Renren, a Shanghai-based businessman who is well connected politically, but they do not care and are apathetic because they know they do not have a voice in the political process. Pointing to the November 15 multi-fatality collapse of a subway construction site in Hangzhou, Zhang said he is pessimistic that public safety problems (including the milk scandal) will be adequately addressed by the government. Legal Scholars: Class Action Suits Offer No Hope -------------- --- ¶5. (C) Shanghai-based legal scholars likewise hold little optimism for adequate governmental action to address public safety concerns, stating that Chinese law offers little hope to victims of the milk scandal. Zhang Wusheng at Fudan University Law School told Poloff on October 27 that most lawyers in Shanghai would support adopting U.S. practices on class action lawsuits, particularly to address food safety problems. Unfortunately, however, local governments still have the right to block class action lawsuits from being accepted by local courts, Zhang Wusheng said, and especially in developed areas like Shanghai, courts will not accept class action lawsuits because the local government believes the suits will lead to social instability. The only recourse for victims of the milk scandal, therefore, will be offers of compensation by local governments, he predicts. ¶6. (C) Zhang Wusheng lamented that the inability of citizens to band together for class action lawsuits is yet another example of China's lack of judicial independence. Tong Zhiwei, a law professor at East China University for Politics and Law, agreed, stating that in the milk case, "judges' hands are tied." With local courts controlled by local governments, and with local officials afraid that class action lawsuits would overwhelm courts if they were permitted, there is "no room for judicial independence," Tong said. Comment -------------- ¶7. (C) Shanghai-based observers offered a pessimistic view of the inability of local governments, civil society, and the courts to address public safety concerns such as the milk scandal. While local residents might be angry about food safety problems, few have protested because either they are privileged by Chinese standards and are not concerned about the plight of poor Chinese who are sick or whose children have died as a result of contaminated milk powder, or they are poor residents in a relatively wealthy part of China who feel they have no voice in the political process and no legal recourse. Either way, the milk scandal further demonstrates that in Shanghai, economic development has not led to commensurate political or legal reform. CAMP