Baby formula: whose problem?
In Chinese societies the birthrate tends to increase in the Year of the Dragon and 2012 was such a year. That explains the rise in demand for baby formula on the mainland. This is true, but not the whole truth. Parallel trade on the Hong Kong border with Shenzhen has existed for decades. In the 1960s, for example, Hong Kong people brought cooking oil, dry food and clothing back to their hometowns on the mainland across the border. In the 1970s and early 1980s, people brought household electric appliances. Today, parallel trade remains active. Baby formula and numerous basic necessities are brought across the border.
One should take an economic viewpoint. Economic order has been weak in the entire mainland economy. Fake products, violation of copyright, abuse of production and social ethics are still common. Since the discovery of a toxic milk case on the mainland several years ago, the situation has not improved. Even though there are many genuine products on sale, mainland consumers do not trust what they are buying. Product insecurity has forced them to shop elsewhere. Baby formula is particularly important as there is no alternative.
The baby formula problem is not a Hong Kong problem. It is a spillover from the mainland's poor production and consumer distrust that mothers have to come to Hong Kong and Macao to buy essential goods. Baby formula, cosmetics and medicines are clear examples. The Individual Visit Scheme has become a convenient channel through which consumers shop for necessities. The solution on the mainland side will be to rebuild consumer confidence. This may take a long time, but without strong economic ethics and the revival of genuine goods, mainland consumers will go elsewhere.
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