To die of success

"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically(...)That will be done with more fertilizer, with genetically modified seeds, and with advanced machinery and technology". BMO strategist Donald Coxe

The latest generation of Chinese-Americans, many of whom grew up in the restaurants their parents worked in, are increasingly choosing legal and medical careers over the kitchen. As a result, Chinese restaurants have been relying even more on imports from Hong Kong, Taiwan or mainland China.

But the sizzling economy in China has raised the incomes and profiles of the best chefs, who now find it less desirable to leave their families and friends halfway around the world.

Several major restaurant owners in the city said salaries for Chinese executive chefs range from $42,000 to $50,000, depending on the size of the business, a 30% rise in the past five years. In China, top chefs are getting close to those amounts, while the cost of living in cities like Beijing and Shanghai is still a lot lower. New York Daily News

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When I was a little boy, oh so long ago, my grandmother, who followed in the great culinary traditions of Scotland and Ireland, used to encourage me whenever I refused to eat some little horror that she had dished up, by saying, "think of all the starving millions in China!". Think indeed.

It is true that in the last two hundred years countless millions of Chinese have starved to death in many famines that swept that country. The same of course was true of the other Asiatic giant, India. Both countries were synonymous with dramatic poverty or at the best a picturesque, austere simplicity. Certainly western imperialism had much to do with the poverty of countries that had been prosperous for thousands of years before the industrial revolution.

Globalization has changed all that, instead of simply providing raw materials and captive markets for our manufactures China and India, and the rest of Asia, have become seamlessly integrated into our economies and hundreds of millions of their citizens are now part of a global middle class with middle class aspirations. Naturally the new middle classes of China and India want to eat the same food as the American and European middle classes eat -- they probably always did -- but now they can pay for it.

I stood in Zhang Meidi's cabbage patch, kicking the dirt with my boots.(...) This is China's bread basket. Wheat has been grown here for thousands of years. But Zhang Meidi has given up on it(...) The prices in the market were good these days, she said, but not for wheat.(...) She started by giving me a lesson on China's food chain. First, she explained, people in China now had more money so they wanted to eat better things, more meat and more fruit and vegetables. That is why she is growing cabbages. Her little handkerchief of land would grow enough wheat to earn about £200 ($395) but, by planting cabbages, she had almost trebled her earnings. And, in the summer, she would grow tomatoes and earn almost £700 ($1,300).(...) Zhang Meidi and her neighbours were being swallowed up by the city. Urbanisation and the creeping desert in the north mean that China is losing 25 million acres (10m hectares) of farmland a year. And just as the amount of land is shrinking, the demand for food is getting greater. When she was younger, Zhang Meidi explained, her family would only have meat on special occasions. Pork would be served when guests arrived or during China's big national holidays. Now it was on their dinner table two or three times a week.(...) Over the next 12 years, an estimated 320 million people will move to cities. As one analyst put it, a country larger than the United States will be created by new urban Chinese by 2020. And when they come to the cities, these new arrivals - almost instantly - start eating more protein. Now that they no longer grown their own food, and with more wages in their pocket, their diet changes. So Chinese people are eating less wheat and fewer grains in general because they are upgrading to meats, especially pork. But that pork comes from hungry pigs who consume a lot more grain.(...) And other crops will follow. The days of food self-sufficiency in China are numbered. So, like the rest of us, China will turn to Australia, Africa and South America to fill its belly. It is small wonder that food prices are climbing everywhere, not just here in China. BBC News

And it isn't just food.

Virtually every automaker on earth will keep a close eye on the Indian Auto Show in New Delhi, where Tata plans to introduce what it's calling the People's Car on Jan. 10. The industry is looking to emerging markets for growth, and many companies are gearing up to build cars that can be sold at rock-bottom prices—in both developing countries and more established markets. Toyota and Volkswagen's Skoda subsidiary are planning small cars for India. Suzuki says it will soon cut the price of its cheapest model in India. And Renault-Nissan has teamed up with Indian motorcycle maker Bajaj Auto to launch a $3,000 car next year. "If Tata can do it, we can do it," says Renault-Nissan Chairman Carlos Ghosn. BusinessWeek

Is there enough oil on earth to fuel an India with as many cars per capita as the USA or Europe? Is there enough air in the world to breathe after those cars pour their exhaust fumes into it. Is there enough grain in the world to feed all the pigs that the Chinese could eat? Is there enough water to water that grain? Are we about to run into the theories of Karl Marx like a speeding truck running into a wall of cement?

The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere. The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country.... It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

It took along time, but that prophesy has finally been fulfilled. We are very, very close to finding out now whether or not our immense well being has always been predicated on the misery of others. And we are also close to finding out whether or not the whole thing will come crashing down around our ears if the others come to live as well as we do or even dream of doing so. DS

The era of cheap food is over.

David Seaton's News Links
This should be the most important story in the world, but it isn't... and perhaps that is the most important story in the world . DS

World food stocks dwindling rapidly, UN warns - International Herald Tribune
Abstract: In an "unforeseen and unprecedented" shift, the world food supply is dwindling rapidly and food prices are soaring to historic levels, the top food and agriculture official of the United Nations warned Monday. The changes created "a very serious risk that fewer people will be able to get food," particularly in the developing world, said Jacques Diouf, head of the UN Food and Agriculture Organization. The agency's food price index rose by more than 40 percent this year, compared with 9 percent the year before - a rate that was already unacceptable, he said. New figures show that the total cost of foodstuffs imported by the neediest countries rose 25 percent, to $107 million, in the last year. At the same time, reserves of cereals are severely depleted, FAO records show. World wheat stores declined 11 percent this year, to the lowest level since 1980.(...) Diouf blamed a confluence of recent supply and demand factors for the crisis, and he predicted that those factors were here to stay. On the supply side, these include the early effects of global warming, which has decreased crop yields in some crucial places, and a shift away from farming for human consumption toward crops for biofuels and cattle feed. Demand for grain is increasing with the world population, and more is diverted to feed cattle as the population of upwardly mobile meat-eaters grows. "We're concerned that we are facing the perfect storm for the world's hungry," said Josette Sheeran, executive director of the World Food Program, in a telephone interview. READ IT ALL

Europe's wonderful regulations

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Europe's "superpower" secret weapon is its regulatory prowess. To create and enforce regulations that guarantee the quality, safety and healthfulness of an infinite number of products among 25 nations of disparate traditions is Europe's greatest gift to the contemporary world.

A friend of mine, a Spanish restaurateur, tells me that in his opinion the biggest effect of Spain's entry into the European Union has been the effect of EU regulations on the quality of common table wine and bulk olive oil. Before Spain's entry in the EU these products were produced in appalling sanitary conditions. And there was even a case of mass poisoning from tainted rape seed oil in 1981 which has caused the death of 3,000 people over the years and left 20,000 with permanently impaired health. The European Union's stringent regulatory apparatus that many find "interventionist" and anti-democratic with its "faceless bureaucrats in Brussels" has vastly improved the image of Spanish food and wines: especially the food and wine that average people consume daily.

In the USA thousands of pet owners are heart broken because their dogs and cats have died from eating tainted pet food "fillers" from China. In Panama dozens of people have died from brushing their teeth with poisoned, Chinese counterfeit, brand name toothpaste. A major mass poisoning of human beings in a developed country produced by fraudulent Chinese business practices could cast suspicion on all things Chinese and bring the Chinese economic "miracle" crashing to the ground.

In the maelstrom of globalization it is Europe's superior international regulatory capabilities that will ensure that millions will prefer products from the EU over all others. DS

When Fakery Turns Fatal - New York Times
Abstract: They might be called China’s renegade businessmen, small entrepreneurs who are experts at counterfeiting and willing to go to extraordinary lengths to make a profit. But just how far out of the Chinese mainstream are they? Here in Wudi in eastern China, a few companies tried to save money by slipping the industrial chemical melamine into pet food ingredients as a cheap protein enhancer, helping incite one of the largest pet food recalls ever. In Taixing, a city far to the south, a small business cheated the system by substituting a cheap toxic chemical for pharmaceutical-grade syrup, leading to a mass poisoning in Panama. And in the eastern province of Anhui, a group of entrepreneurs concocted a fake baby-milk formula that eventually killed dozens of rural children. The incidents are the latest indications that cutting corners or producing fake goods is not just a legacy of China’s initial rush toward the free market three decades ago but still woven into the fabric of the nation’s thriving industrial economy. It is driven by entrepreneurs who are taking advantage of a weak legal system, lax regulations and a business culture where bribery and corruption are rampant.(...) Counterfeiting, of course, is not new to China. Since this country’s economic reforms began to take root in the 1980s, businesses have engineered countless ways to produce everything from fake car parts, cosmetics and brand name bags to counterfeit electrical cables and phony Viagra. Counterfeiting rings are broken nearly every week; nonetheless, the government seems to be waging a losing battle against the operations.(...) But the discovery of dangerous ingredients in foods and drugs has raised more serious questions.(...) But agricultural workers and experts in this region tell a different story. They say the practice of doctoring animal and fish feed with melamine and other ingredients is widespread in China. And Wudi, they say, has long been known as a center for such activity. “Wudi became famous for fake fish powder almost 10 years ago,” said Chen Baojiang, a professor of animal nutrition at the Agricultural University of Hebei. (Fish powder is used as a protein additive to animal feed, including fish feed.) “All kinds of fillers have been used. At the beginning it was vegetable protein, then urea. Now it’s feather powder.”(...) For decades, small entrepreneurs have started out counterfeiting in emerging industries in China, seeking an early advantage and their first pot of gold. Often, they try to get around regulations, or simply believe small-time cheating that involves adding cheap substitutes or low-grade ingredients will not cause much harm. “Basically, for entrepreneurs, if something is not explicitly banned — it’s not banned,” said Dali Yang, who teaches at the University of Chicago and has studied China’s food safety regulations. “As long as people are not sick or dying, it’s O.K.”Experts say counterfeiters are now moving to outlying areas of the country, where it is easier to evade regulation. The counterfeiters are also moving into food and agriculture, which are difficult to monitor because they involve small farmers and entrepreneurs. Small-time entrepreneurs have played the same game over and over with other products, experts say, adding cheap substitute chemicals to toothpaste; using lower-grade materials to produce car parts, batteries and cellphones; and creating factories that specialize in counterfeit goods. Last year, for instance, pirates were caught faking an entire company, setting up a “branch” of the NEC Corporation of Japan, including 18 factories and warehouses in China and Taiwan. “We have to bear in mind they probably don’t think about the consequences at all,” said Steve Tsang, a China specialist who teaches at Oxford University. “They’re probably only thinking of making a fast buck.” READ IT ALL