I saw some pretty scary stuff this past weekend. They were fakes of some of the rarest, but attainable, coins in the coin collecting hobby. They came from China. This is happening even though there is a 1973 act, US Hobby Protection Act – 15USC-2101, says that coins must be marked as ‘COPY’ when brought into this country. These weren’t. They are appearing on eBay. Some correctly marked but others, it is unclear. The dealer told me the Chinese companies actually take pride in how accurate and close to the original they can make their replicas. This will increase the requirements for certification and grading. The US companies have some legal recourse but obviously the Chinese government does not care and actually may encourage it, this activity does provide jobs.

This act only covers numistmatic, collectible, coins and political memorabilia. In 1988 the Federal Trade Commission did an update but in their stupidity did not extend it to other collectibles. See this blog comment from an appraisal firm in Pennsylvania “No Protection.”

The supply of these fakes is nearly endless. Here’s one table display in China. It will be interesting when China starts to develop intellectual property and companies outside of their control start to violate their property rights.

News agencies are reporting China’s courts issuing death sentences to two executives involved with one of the firms involved with producing melamine tainted milk that lead to the deaths of thousands of infants.

Does the punishment fit the crime? I’m not sure any punishment does. Does another killing fix a first killing?

Are these ‘public sacrifices’? Probably. Grieved people wanted retribution to the extreme.

Does this fix the system? Doubtful. Although people got judgements against these executives where are the trials of the officials? Where are the policy and market changes? As the reporting below indicates, China’s government is most concerned about unrest (i.e., losing their control). Not about getting the system right to reduce the risk of this ever happening or happening to such a degree.

Here’s how Reuters reported it. We put in bold comments that jumped out at us.

SHIJIAZHUANG, China (Reuters) – A Chinese court on Thursday sentenced two men to death for their role in a tainted milk scandal that killed at least six children, while the woman most widely blamed for the tragedy got life in jail.

Nearly 300,000 children fell ill last year after drinking milk intentionally laced with melamine, a toxic industrial compound that can give a fake positive on protein tests.

The latest in a string of food safety failures that have blighted the “made in China” brand, it was also one of the worst and prompted an outpouring of public anger.

Beijing may have timed the sentencing to try and tame outrage ahead of China’s most important holiday.

The closely watched trial of middlemen and executives from the Sanlu Group, a now bankrupt firm that had failed to report cases of infants getting sick from drinking its products, wrapped up just before the Lunar New Year.

A handful of parents traveled to the gritty industrial town of Shijiazhuang and waited for hours in the freezing cold — at a time when most of the country is planning family reunions — to hear what justice their children would get.

“Spring Festival is coming up, but what happiness is there for us?” said Hou Rongbo, whose son died in early January just a week before his first birthday. Hou believes his death from a leukemia was caused or worsened by melamine that also gave him kidney stones.

Many families have focused their anger on Sanlu’s former general manager, Tian Wenhua, and felt betrayed that she would not face execution. Tian pleaded guilty late last year to charges that do not carry the death sentence.

“She should have been shot,” said Zheng Shuzhen, a 48-year-old who said her granddaughter died in June of kidney failure after drinking Sanlu milk formula. She said the girl was not on official lists of victims as she died before the scandal came to light.

“So many children died but they kept the official number down so that she could get life (in jail), not death,” Zheng added.

Tian was also fined 24.5 million yuan ($3.6 million). Sanlu, partly owned by New Zealand’s Fonterra dairy cooperative, was fined 49 million yuan.

Melamine, which can cause kidney stones, is meant to be used in making plastics, fertilisers and even concrete. Its high nitrogen content allows protein levels to appear higher when it is added to milk or animal feed.

POLITICAL VOLATILITY

Claims of official concealment and indifference have turned the milk powder case into a volatile political issue for the ruling Communist Party, which is wary of protests.

Police detained two parents to stop them attending the trial, where they wanted to raise questions about compensation and long-term health problems, fellow activists said on Wednesday.

The family of the first child killed by the tainted milk have now received $29,000, state media said last week.

But many other parents say payouts are too low and limited in their scope, and they fear officials are ignoring or covering up information on the long-term impacts of melamine poisoning.

“What we want is not a verdict. We want the government to properly research the effects of melamine and tell us what to expect. Now melamine is still a blank,” said Ma Hongbin, a company technician in the far southern city of Shenzhen. His son Ma Tianxing required an operation to remove kidney stones.

On Thursday, police guarded the courthouse, nudging people away but avoiding confrontation. The session to announce the verdicts and sentences was closed to the public but a court official gave details to reporters.

One of the men sentenced to death was Zhang Yujun, who had made and sold over 600 tonnes of “protein powder” laced with melamine between October 2007 and August 2008, the official China Daily quoted prosecutors as saying earlier this month.

The powder was bought by middlemen who added it to pooled, watered-down milk from farmers that was then sold on to Sanlu. One of these men was also given the death sentence.

A third man was given a suspended death sentence, which usually means life in prison on good behavior. Other defendants received from five years to life imprisonment.

The court had announced it would sentence 21 defendants implicated in the scandal on Thursday afternoon. However, it said shortly before the court opened that nine of them would be sentenced at other courts.

It was good that President Obama’s inaugural was carried live around the world. It was good that he was a few minutes late in getting started. Why? Because the censors in China could not adjust in real time to completely cover up parts of his speech. As a result, some of it got through. President Obama may not have many other chances to get this message through. This falls under the Systemic Problems category. Its like the US with its financial follies that are causing such hardship, when leadership suppresses dissent and opposing ideas problems build up. Problems happen anyway but they get larger when contrary opinions are suppressed. At least in the US there were those that were reporting on the financial problems before they became problems. In the US too many were enjoying the party to listen to these dissents. In China they don’t even get heard.

From The Associated Press:

Chinese translation cuts out parts of Obama speech

By ANITA CHANG

BEIJING – The official Chinese translation of President Barack Obama’s inauguration speech was missing his references to communism and dissent, while a live broadcast on state television Wednesday quickly cut away to the anchor when the topic was mentioned.

The comments by the newly installed U.S. president veered into politically sensitive territory for China’s ruling Communist Party, which maintains a tight grip over the Internet and the entirely state-run media. Beijing tolerates little dissent and frequently decries foreign interference in its internal affairs.

At one point, Obama said earlier generations “faced down communism and fascism not just with missiles and tanks, but with sturdy alliances and enduring convictions.” He later addressed “those who cling to power through corruption and deceit and the silencing of dissent — know that you are on the wrong side of history.”

The Chinese translation of the speech, credited to the Web site of the official China Daily newspaper, was missing the word “communism” in the first sentence. The paragraph with the sentence on dissent had been removed entirely.

The censored version was carried by the state-run Xinhua News Agency and posted on popular online portals Sina and Sohu. Another portal, Netease, used a version without the paragraph mentioning communism, but retaining the part about dissent.

The news channel of state broadcaster China Central Television broadcast the speech live early Wednesday local time, but appeared caught off-guard by the statement about facing down communism.

The translator had no sooner said “fascism and communism” when the audio faded out from Obama’s speech and cameras cut back to the studio anchor, who seemed flustered for a second before turning to ask an expert what challenges the president faces in turning around the U.S. economy.

Wang Jianhong, deputy director of the CCTV general editing department, said he did not stay up to watch the inauguration broadcast but suggested the transition was a normal part of the program.

“There are breakaways even when broadcasting China‘s own meetings,” he said. “Americans might care a lot about the presidential inauguration, but Chinese may not be very interested.”

No one in the editing department of the China Daily Web site was immediately available to answer questions.

The full translation of Obama’s speech could be viewed on the Web site of Hong Kong-based broadcaster Phoenix Satellite Television, which has a reputation as a more independent news source. The China Daily Web site posted Obama’s full remarks in English only.

China has previously altered the words of U.S. officials. A 2004 speech in Shanghai by former Vice President Dick Cheney was broadcast live on state-run television at the insistence of U.S. officials, but the Chinese transcript of the remarks deleted references to political freedom.

In 2003, the memoirs of then-Sen. Hillary Rodham Clinton were pulled from publication in China after the government-backed publisher removed references to the 1989 Tiananmen Square democracy protests and altered Clinton’s comments about human rights activist Harry Wu.

New York Times reports:

BEIJING — Local officials in Shandong Province have apparently found a cost-effective way to deal with gadflies, whistle-blowers and all manner of muckraking citizens who dare to challenge the authorities: dispatch them to the local psychiatric hospital.

In an investigative report published Monday by a state-owned newspaper, public security officials in the city of Xintai in Shandong Province were said to have been institutionalizing residents who persist in their personal campaigns to expose corruption or the unfair seizure of their property. Some people said they were committed for up to two years, and several of those interviewed said they were forcibly medicated.

The article, in The Beijing News, said most inmates were released after they agreed to give up their causes.

Sun Fawu, 57, a farmer seeking compensation for land spoiled by a coal-mining operation, said he was seized by local authorities on his way to petition the central government in Beijing and taken to the Xintai Mental Health Center in October.

During a 20-day stay, he said, he was lashed to a bed, forced to take pills and given injections that made him numb and woozy. According to the paper, when he told the doctor he was a petitioner, not mentally ill, the doctor said: “I don’t care if you’re sick or not. As long as you are sent by the township government, I’ll treat you as a mental patient.”

In an interview with the newspaper, the hospital’s director, Wu Yuzhu, acknowledged that some of the 18 patients brought there by the police in recent years were not deranged, but he said that he had no choice but to take them in. “The hospital also had its misgivings,” he said.

Xintai officials do not see any shame in the tactic, and they boasted that hospitalizing people they characterized as troublemakers saved money that would have been spent chasing them to Beijing. There is another reason to stop petitioners who seek redress from higher levels of government: they can prove embarrassing to local officials, especially if they make it to Beijing.

The Xintai government Web site noted that provincial authorities had recently referred to Xintai as “an advanced city in building a safe Shandong.” They said that from January to May this year, the number of petitioners who went over the heads of local authorities was 274, a 4 percent drop from the same period in 2007. Although China is not known for the kind of systematic abuse of psychiatry that occurred in the Soviet Union, human rights advocates say forced institutionalizations are not uncommon in smaller cities. Robin Munro, the research director of China Labor Bulletin, a rights organization in Hong Kong, said such “an kang” wards — Chinese for peace and health — were a convenient and effective means of dealing with pesky dissidents.

“Once a detainee has been officially diagnosed as dangerously mentally ill, they’re immediately taken out of the criminal justice system and they lose all legal rights,” said Mr. Munro, who has researched China’s practice of psychiatric detention.

In recent years practitioners of Falun Gong, the banned spiritual movement, have complained of what they call coerced hospitalizations. One of China’s best-known dissidents, Wang Wanxing, spent 13 years in a police-run psychiatric institution under conditions he later described as abusive.

In one recent, well-publicized case, Wang Jingmei, the mother of a man convicted of killing six policemen in Shanghai, was held incommunicado at a mental hospital for five months and released only days before her son was executed in late November.

The article in The Beijing News about the hospitalizations in Xintai was notable for the attention it gained in China’s constrained state-run media. Such Communist Party stalwarts as People’s Daily and the Xinhua news agency republished the article, and it was picked up by scores of Web sites. At Sina.com, the country’s most popular portal, the report ranked as the fifth most-viewed news headline, and readers posted more than 23,000 comments by evening. The indignation expressed was universal, with many clamoring for the dismissal of those involved. “They’re no different from animals,” read one post. “No, they’re worse.”

By Monday evening, the Xintai city government was rejecting the report by The Beijing News as reckless and slanted. In a telephone interview broadcast on Shandong provincial television, an unidentified municipal official suggested that those confined to the mental hospital had gone mad from their single-minded quest for justice. “There are some people who have been petitioning for years and become mentally aggravated,” the official said.

Reached by phone on Monday, a hospital employee said Mr. Wu, the hospital director who voiced his misgivings to The Beijing News, was unavailable. The employee, Hu Peng, said that officials from the local government had taken him away for “a meeting” earlier in the day.

Although he would not provide a reporter with contact information for the former patients, Mr. Hu defended the hospitalizations, saying that all those delivered by the Public Security Bureau were sick. He added that the hospital was not authorized to provide a diagnosis to the patients, only to treat them. “We definitely would not accept those without mental problems,” he said.

As companies eventually look to their own self interest, which ultimately is the self interest of their customers, we will start to see more actions as reported in this Business Week article:

China Losing Luster with U.S. Manufacturers

A new survey finds rising worries about product quality and intellectual-property theft. More U.S. companies are looking to Mexico and their own backyard

By Pete Engardio

Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China’s allure as a manufacturing platform. A new study by supply-chain consulting firm AMR Research found that quality concerns are among the chief reasons U.S. manufacturers are scaling back plans to source more goods from China.

Instead, U.S. companies are looking harder at Mexico and other locales closer to home when exploring where to put new capacity. The findings are based on a survey of 130 U.S. manufacturers, ranging from producers of drugs (BusinessWeek, 9/4/08) and computers to auto parts. The survey, completed in mid-October, found a sharp swing in attitudes toward China since May, when AMR conducted a similar study.

The reasons for the shift suggest serious problems for China’s export machine that go far beyond the concerns over rising costs for wages, shipping, and materials that got a lot of attention earlier this year.

AMR asked U.S. manufacturers to rate different regions around the world (China and the U.S. were each counted as region unto themselves) on 15 different risks tied to sourcing products for sale in America. Just a few months ago the biggest concerns over China were rising factory wages and the hike in trans-Pacific shipping costs owing to soaring fuel prices. Since then, the 60% plunge in oil prices and a sharp falloff in U.S. imports from China have caused spot freight prices on ocean shipping to crash.

China Is Tops in Manufacturing Risk

Now, the biggest concerns over China are quality and theft of intellectual property (BusinessWeek.com, 4/27/06). Half of respondents to the survey cited China as the biggest source of “risk” for product quality failure. Fifty-seven percent rated China as the biggest risk of intellectual-property infringement. Both categories represented sharp increases from May. No other region was named as the biggest source of risk in those two areas by more than 7% of respondents.

“China is in a league of its own in terms of risks associated with intellectual property and quality,” says Kevin O’Marah, AMR’s chief strategist.

In fact, China ranked highest in 9 of the 15 risk factors. Rising labor costs are still an important factor for businesses, with 35% citing China as the leading source of concern. Other risk categories where China ranked highest included regulatory compliance, commodity price volatility, supply-chain security breaches, and information technology problems. The shortage of Chinese managerial talent—long one of the top risk factors during the go-go era that ended last year—has tailed off as a major worry.

The findings don’t suggest a mass pullout from China, O’Marah says. Two out of three companies said they still plan to expand there, mainly because they already have operations and component suppliers in the mainland. But that’s a big falloff since May, when four out of five companies said they had China expansion plans. The number of companies saying they plan to actually decrease sourcing from China rose from 9% to 17%. Asia in general is falling from favor as an import source, the AMR study found.

Less-Visible Costs of Outsourcing to China

Where are the hottest new places for manufacturing investment? For U.S. companies, Latin America seems poised to be the big winner. The number of companies planning Latin expansions rose from four out of five in May to five out of six in October. Mexico is by far seen as the leading destination, cited by 73% as the primary source for new outsourcing. AMR also found that more production work is expected to shift to the U.S., with the percentage of companies planning to invest at home rising from 22% to 33%. Of course, this snapshot of corporate plans may have changed since the survey was taken. The deepening U.S. recession may prompt U.S. companies to curtail expansion anywhere.

The souring attitude should be disturbing to China’s leadership. If the issue were just eroding price advantages, that would be less cause for alarm. Costs could swing back in China’s favor, for example, with fluctuations in currency rates, commodity prices, or changes in China’s job market. What’s more, Chinese manufacturers have a long history of sacrificing profit margins with lowball pricing to win market share.

The AMR study suggests, however, that U.S. companies are starting to better appreciate the less-visible costs of producing in China. Quality problems, rampant piracy (BusinessWeek, 10/2/08), allegations of sweatshop abuses, worker protests, and other factors not only drive up costs but also harm the value of brands and corporate reputations. “Companies are realizing that the fully loaded costs of importing from China are a lot higher than they imagined,” says O’Marah.

Trouble is, China will not be able to improve its quality problem overnight. It will require a long-term transformation of China’s regulatory bureaucracy, legal system, and management practices. And Beijing has been promising to control intellectual-property theft for decades, with unimpressive results. If China doesn’t start making progress fast, the current slump in export manufacturing (BusinessWeek, 3/27/08) could be the beginning of a longer-term pullback.

Scientists say such blazes produce greenhouse gases

BY TIM JOHNSON • MCCLATCHY NEWSPAPERS • November 16, 2008

RUJIGOU, China — The barren hillsides give a hint of the inferno underfoot. White smoke billows from cracks in the earth, venting a sulfurous, rotten smell into the air. The rocky ground is hot to the touch, and heat penetrates the soles of shoes.

Beneath some rocks, an eerie red glow betrays an unseen hell: the epicenter of a severe underground coal fire.

“Don’t stay too long,” warned Ma Ping, a retired coal miner. “The gases are poisonous.”

Another miner tugs on the sleeve of a visitor.

“You can cook a potato here,” said Zhou Ningsheng, his face still black from a just-finished shift, as he pointed to a vent in the earth. “You can see with your own eyes.”

China has the worst underground coal fires of any country. The fires destroy as much as 20 million tons of coal annually, nearly the equivalent of Germany’s entire annual production. The costs go beyond the waste of a valuable fuel, however.

Scientists blame uncontrolled coal fires as a significant source of greenhouse gases, which lead to global warming. Unnoticed by most people, the coal fires can burn for years — even decades and longer — seeping carbon dioxide, methane and other gases that warm the atmosphere.

“Coal fires are a disaster for all of humanity. And it’s only due to global warming that people are finally beginning to pay attention,” said Guan Haiyan, a coal fire expert at Shenhua Remote Sensing and Geo-engineering Co.

The rising demand for coal worldwide to satisfy a hunger for energy has given way to greater mining and a proliferation of fires in coal seams and abandoned mines. China, which has tripled coal production in the past three decades, has mobilized thousands of firefighters to combat the 62 known coal fires that are scattered across its north.

Major fires have been extinguished. However, Dutch scientists scribbling back-of-the-envelope calculations say that coal fires in China may still be the cause of 2% to 3% of the world’s annual emissions of carbon dioxide from burning fossil fuels.

The scientists call for greatly increased efforts to extinguish China’s coal fires — and those in places such as India, Russia and Indonesia — as a practical step to fighting global warming.

“It’s a relatively cheap way to stop greenhouse gas emissions,” said Horst Rueter, a German geophysicist who is the scientific coordinator for a Sino-German initiative to combat China’s coal fires.

Rueter said he thought China’s coal fires accounted for at least half the global emissions from coal fires around the world, making them a steady source of pollutants.

Others say that such runaway fires, while significant, pale beside overall emissions from the United States, a fossil fuel glutton that may give off 25% of the world’s greenhouse gases.

How fires happen

Coal fires can occur naturally and are not a new phenomenon.

• Australia’s Burning Mountain has smoldered for thousands of years.

• An underground coal fire in Centralia, Pa., began in 1962, eventually opening sinkholes that threatened to gobble and incinerate pets and children. Centralia became a ghost town, and experts say the fire there may burn for a century or more.

• At the Rujigou coalfield in the Ningxia Autonomous Region of western China, fires have burned since the late Qing Dynasty (1644-1911).

Many coal fires begin spontaneously when underground seams come in contact with the air — either through fault lines from earthquakes or mining activity — generating a chemical reaction that can slowly heat and ignite the coal. Human activity is an intensifier of the fires, however, especially when workers abandon dust-filled mines without sealing the airshafts, allowing temperatures to build.

China’s coal fires stretch across a northern belt that runs nearly 3,000 miles from east to west. A cluster of them are in Ningxia and a little to the north in Inner Mongolia at the edge of the Gobi Desert. The concentration of coal fires in the region puts it in the running for one of the world’s worst ecological disasters, and only humans can extinguish the problem.

“These fires just don’t go out,” said Anupma Prakash of the University of Alaska at Fairbanks, an expert on mapping coal fires.

The costs of coal

Coal fires pollute the air with putrid smoke and wreak havoc on water supplies and aboveground ecology, creating so-called heat islands where little vegetation can grow, not even hardy grasses. Wildlife flees.

Coal fuels China’s roaring economy, powering its factories but also taking a human, social and environmental toll.

China uses coal for 70% of its primary energy needs, far higher than the world average of 40%. China’s coal production topped 2.3 billion tons last year, equaling the output of the United States, Russia, Australia and India combined, said Yang Fuqiang of the Beijing office of the Energy Foundation, a San Francisco group that promotes energy efficiency.

Even as it provides power, coal exploitation leaves a trail of deaths.

Last year, 3,786 Chinese miners died in accidents, a rate 70 times higher than for miners in the United States.

Coal burning is a principal cause of air pollution in China, where 400,000 people die each year of illnesses related to that pollution, the World Bank estimates, mainly heart and lung diseases.

During the past decade, China has put far greater emphasis on attacking coal fires. The work is labor intensive, costly and dangerous in its initial stages. The blazes can reach underground temperatures of 1,300 to 1,500 degrees Fahrenheit, imperiling firefighters.

Reuters reports that South Korea is having to remove thousands of products from their grocery shelves because they contain tainted Chinese milk. This comes after South Korean authorities earlier this month found melamine, a plastic added to milk to fake boost its protein content, in other products received from China.

South Korea has ordered 23 tonnes of Chinese processed egg products to be destroyed after they were found to be tainted with melamine, the latest in a series of health scares blighting the “made in China” brand.

In an interconnected world, which is a good thing, what happens in another country DOES concern your country. Poor or corrupt regulation and inspection regimes affect us all until we push back. Going “protectionist” is not the answer but neither is “free trade.” Trade is not free if a country lets poisons into their products, use abusive labor practices, or damage the environment. Companies that are allowed these practices have a cost advantage over honest companies. All products from countries that allow any of these practices are potential problems waiting to be caught.

We need “fair trade” which includes open trade but balanced, responsible regulation. The Regan doctrine of “trust but verify” which was applied to arms treaties comes to mind as being applicable here. We were willing to do it with explosive weapons that could kill people. We need to do it with non-explosive items that could kill people as well.

China has been swept by a series of food- and product-safety scandals involving goods as diverse as toys, tires, toothpaste, pet food, fish, beans, dumplings and baby cribs.

Wal-Mart Stores Inc said Wednesday it plans to crack down on its Chinese suppliers, enforcing stricter quality and environmental standards.

What caught my attention in the following AP report was the “…more than 10,000 children remain hospitalized…”. I may have missed it but this is the first I’ve seen such a number. Given the wording, “remain hospitalized” means that there were many more. Now China’s got a huge population but still this is a lot of children. I certainly feel for the parents but there’s a second order affect here. China still has a one family-one child policy. What if your child dies? Actually, even worse, what if your child lives but is disabled for life?

One bright spot is that this could be some signs that the Chinese court system may be working. An independent judiciary and the rule of law are two of human-kind’s better inventions. These are still relatively new in China and much of the third world. This will be an interesting test of their system. Can China allow criticism and non-violent challenge from within? Their record so far has been pretty poor. (The USA is not necessarily a model either. Much litigation is near extortion. Many outcomes are determined by how good a lawyer you can afford.)

Second lawsuit filed in tainted milk scandal
Friday October 10, 2:49 am ET
By Tini Tran, Associated Press Writer

Migrant worker files second lawsuit against Chinese dairy company in tainted milk scandal

BEIJING (AP) — A second lawsuit has been filed against a Chinese dairy company at the heart of the tainted milk crisis, an attorney said Friday, as more than 10,000 children remained hospitalized after drinking milk powder laced with an industrial chemical.

Zhang Xiuwen, a migrant worker from southern Guangdong province, sued Sanlu Group Co., after his 11-month-old son was diagnosed with kidney stones, his lawyer Chen Beiyuan said. The baby had been fed formula produced by the company since birth.

The Guangzhou Intermediate People’s Court has yet to accept the lawsuit, which seeks $132,000 in compensation, Chen said in a telephone interview. He said he was also planning to sue the Dairy Association in China for failing to supervise its members.

Although product liability lawsuits have become more common in recent years, lawyers advising the families of children sickened in the scandal said this week they face growing pressure from government officials to withdraw from the cases.

The milk powder, laced with the chemical melamine, has been blamed for causing the deaths of four infants and sickening more than 54,000 others.

Chinese dairy suppliers have been accused of adding melamine — used in plastics, paint and adhesives — to watered-down milk to make the product appear rich in protein and fool quality control tests.

The practice was apparently widespread in the industry, with government investigations showing that 37 Chinese dairy companies, including its most reputable brands, had tainted dairy products.

Eight of 10,666 children hospitalized are in serious condition after drinking the contaminated powder, which can lead to kidney stones and life-threatening kidney failure, the Health Ministry said this week.

Earlier this month, parents from central Henan province filed the first known lawsuit against Sanlu, seeking $22,000 in compensation for medical, travel and other expenses incurred after their 14-month-old baby developed kidney stones. The infant remains hospitalized.

The court in Zhenping county has also not yet decided whether to accept that case.

“It’s the culture, stupid” to paraphrase President Clinton. In the sense of saving face, even well educated Chinese can’t seem to come to the truth. Actually, I’m surprised this report even got out of China. Cheers to the press.

From Reuters:

BEIJING (Reuters) – A Chinese hospital faces an investigation for failing to report the deaths of 8 newborn babies from infections earlier this month, the official Xinhua news agency said on Thursday.

The deaths between September 5-15 were apparently due to “iatrogenic” infections — illnesses spread by poor hygiene in hospitals — and not from the toxic milk powder that has stricken thousands of other children across China, Xinhua said.

But like the milk scandal, the deaths at the Xi’an Jiaotong University Number One Hospital in the northwest province of Shaanxi may have involved a cover-up, the report said.

Reuters reports on China pressuring lawyers to stop representing victims of the toxic milk companies produced. This is China’s pattern. It is not yet an open society. Granted an open society is messy. USA’s litigation model extorts economic rents to the benefit of lawyers more often than to the benefit of plaintifs. Still, trying to put a lid on dissent as China is doing just increases pressure. Eventually it will blow up.

By Chris Buckley

BEIJING (Reuters) – Chinese lawyers seeking redress for infant victims of toxic milk say they are facing growing official pressure to abandon the efforts, blaming growing government sensitivity over the health scandal.

….

But in other parts of the country where many children are sick, apparently from milk powder, the advocates received tougher warnings, some said.

“The local judicial authorities just don’t want any of us to take part,” said Chang Boyang, a lawyer from central China’s Henan province who helped organise the group. “The pressure on law offices was too heavy. We had to compromise.”

Li said one Henan lawyer had called 15 times on Saturday to ensure his name was wiped from the list of volunteer lawyers.