ARTICLE: "More Ripples From Chinese Product Troubles: Some Baby Bibs Said to Contain Levels of Lead," by Eric Lipton, New York Times, 15 August 2007, p. C1.

You go to China and smell the exhaust fumes from cars and you remember why it was you so often got car-sick as a kid: the leaded fuel. So no surprise China's similarly trapped in our collective past on toys. We got rid of all that stuff in paint, toys, materials, our gas ... when I was just a young kid. China's getting a rapid tutorial on the subject now. Their choice? Get it correct right away or risk long-term loss of market. Product reputation becomes a major source of international regime legitimacy--or the lack thereof--for the Chinese Communist Party. Remember all the wailing over the "China price" and what it imposed on the world? Well, the blowback is just as strong. Here's what I said in BFA:

For every sliver of economic connectivity with the outside world, China is forced to accept more externally imposed rule sets, and over time this process significantly limits what the Party controls while expanding that which the Party only wishes it could control. If China wants to gain “market status” in the WTO because its current nonmarket status means it keeps losing rulings there, then it has to allow a host of profound changes, such as letting global retailers such as Wal-Mart and direct marketers like Avon enter its marketplace. If China wants help in reducing its roughly half a trillion dollars of nonperforming bank loans, then it has to let foreign players enter its market and purchase ownership in local financial institutions (something Goldman Sachs just did). And if China wants to continue enjoying a large trade deficit with the United States, then once it has filled up its currency reserves and flooded both the U.S. Treasury market and the U.S. secondary mortgage market with the excess flow, it invariably needs to start purchasing U.S. companies. This acquisition strategy, in turn, vastly benefits a Chinese private sector that faces a shortfall of seventy-five thousand capable senior executives over the next ten to fifteen years, because what China really needs, almost as much as the companies’ material assets, is their senior managerial talent. And so America needs to ask itself, when Chinese companies, abetted by their government, seek to acquire such U.S. icons as Maytag and UNOCAL, whether or not we achieve more security vis-à-vis China by encouraging this flow of human capital or by blocking these attempts and, by doing so, triggering a protectionist response from China at this point in its rapid embrace of both capitalism and globalization. So while not everyone is ready to call China a market economy, it’s getting awfully hard to find anyone who will call it a Communist one, and that’s the globalization price.

Not magic, just systematically thinking about the future--a skill that can be taught.