China still facing 'grave' food risks



BEIJING // Experts have warned that new rules in China aimed at safeguarding the country's food quality in the wake of the contaminated milk scandal that killed six infants in 2008 are only a framework on which to try to improve standards. A massive increase in the number of specialists able to help enforce tightened regulations is required before the country can be confident the situation has improved, according to those working in the field.

An estimated 300,000 children fell ill in late 2008 after the chemical melamine, which causes kidney problems, was added to milk to increase the apparent protein content. The scandal, which saw allegations of an attempted cover-up levelled against local authorities and also resulted in two executions among those convicted of causing the contamination, led the Chinese government in early 2009 to develop new food safety standards aimed at improving oversight and increasing penalties for contamination.

In February this year, the country set up a food safety commission headed by the vice premier, Li Keqiang, who at the time said "the foundation for the country's food safety is still weak and the situation is grave". Many problems in food safety have developed in China because of the speed at which the industry has grown, according to Ben Embarek, a World Health Organisation official who advises the Chinese government on the subject.

A quarter of a century ago, he said, there was almost no processed food available. Now, he said, the number of products on sale was vast. "It's developed at a pace we haven't seen in other parts of the world," he said. "The private sector has been enormously successful in diversifying so fast and the public sector hasn't been able to keep pace. "That's allowed for some problems to appear, and [they have been] more widely seen here than elsewhere.

"There's been the possibility for a lot of unscrupulous operators to operate without risk of being caught." Speaking at a forum on food safety in Beijing this month, the vice minister of health, Chen Xiaohong, insisted the central government "has always seen food safety as a priority" and had, for example, launched "a crackdown" on illegal food additives. "We've been centrally developing the system for food safety," he said.

Better systems were in place to test whether new food additives were safe, said Li Ning, a deputy director of the Nutrition and Food Safety Institute of the Chinese Centre for Disease Control and Prevention, and monitoring hazardous types of fat in foods would also be improved. Speaking at the forum, she acknowledged the country has "a huge task ahead". "We're going to improve proactive risk planning. Previously it would be the media in the lead and the consumer was often unable to have an accurate assessment," she said.

"There's still some way to go to meet the standards of the developed countries." Werner Christie, a former minister of health in Norway who co-chaired the Beijing forum on food safety, said the new law was "a platform" to be used to improve food safety, but in itself it "cannot remedy" the situation. "It's a necessary backbone but nothing more," he said. Concerns were brought into focus again this month when, in the western province of Qinghai, 64 tonnes of milk powder contaminated with melamine were found in a dairy plant, according to local media. Local officials said they believed the consignment dated back to 2008 and had been stored when it should have been destroyed.

Implementing China's toughened laws effectively required hundreds of more well-qualified people both in the industry and in the authorities to upgrade quality control, Mr Embarek said. China's vast size, and its decentralised system of government, also posed hurdles to the countrywide implementation of standards. "That's a huge challenge," he said. "That explains why you still have these issues popping up on a regular basis."

Despite the difficulties that lie ahead, many consumers already insist their confidence in the food they buy has increased. Wu Xiaoyan, 33, a marketing executive who lives in Beijing, said she was "not worried" about food safety. "All the food now must be safe," she added. Similarly, He Fuyuan, 23, who also works in marketing, said he believed "now the food is much safer" than at the time of the melamine scandal.

However, some remain wary. Zhang Qingyun, 46, a contract worker in Beijing, said she tried sticking to unprocessed foods such as fruit and vegetables as much as possible. "There are no scandals with vegetables," she said. Indeed "it will take time to restore that confidence", according to Mr Embarek, who said consumers needed to see that a system was in place "doing what it's supposed to do". "But consumers have a role to play in pushing the industry into producing safe rather than low cost food." @Email:dbardsley@thenational.ae

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Key findings
  • Over a period of seven years, a team of scientists analysed dietary data from 50,000 North American adults.
  • Eating one or two meals a day was associated with a relative decrease in BMI, compared with three meals. Snacks count as a meal. Likewise, participants who ate more than three meals a day experienced an increase in BMI: the more meals a day, the greater the increase.
  • People who ate breakfast experienced a relative decrease in their BMI compared with “breakfast-skippers”.
  • Those who turned the eating day on its head to make breakfast the biggest meal of the day, did even better.
  • But scrapping dinner altogether gave the best results. The study found that the BMI of subjects who had a long overnight fast (of 18 hours or more) decreased when compared even with those who had a medium overnight fast, of between 12 and 17 hours.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Company Profile

Company name: Namara
Started: June 2022
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Sector: Microfinance
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