WUDI, China — 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.
“This is cut-throat market capitalism,” said Wenran Jiang, a specialist in China who teaches at the University of Alberta. “But the question has to be asked: is this uniquely Chinese or is there simply a lack of regulation in the market?”
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