We can never live in a perfectly safe world, but we can approach product safety in an intelligent manner by weighing the costs and benefits of improving safety standards. What nations should not do is allow the quest for safety to turn into disguised protectionism.
According to United States Ambassador Alan Homer, special envoy for China and the Strategic Economic Dialogue, 'safety requires continuous improvement, but it's important that any government policies in this area ... not be protectionist'.
What China needs most is a more transparent legal system that protects property rights and prevents fraud. The virtues of the free market could then improve safety without recourse to overly intrusive government and corrupted markets.
The execution of Zheng Xiaoyu , the former head of the State Food and Drug Administration, for taking bribes while approving deadly drugs is a stark reminder that government oversight is not a guarantee of safe food and drugs. Even an advanced economy like the US has failed to prevent tainted products from entering the market - and, in some cases, was slow in removing them.
In the real world, neither government intervention nor the market will lead to perfectly safe food and drugs. Achieving 100 per cent safety is not an option. Utopian solutions to socioeconomic problems have always proved disastrous. The question is which mechanism - a market or a planned system - is more likely to bring about a safer environment in which the benefits of achieving safer food and drugs outweigh the costs?
In a free-market system, in which owners of food and drug firms have well-defined private property rights - and, thus, are held liable for irresponsible behaviour - the costs of putting dangerous products on the market (that is, bankruptcy, social shame and imprisonment) will revert back to the owners.
Independent rating agencies will emerge to monitor companies, and product liability laws will be enacted to protect consumers. A free press and the internet will rapidly inform consumers and investors of unsafe products. The stock prices of irresponsible firms will tumble and resources will shift to those firms satisfying consumers' preferences.