(snip)"July 15 (Bloomberg) -- China suspended imports of chicken and pork from Tyson Foods Inc., the biggest U.S. meat processor, and six other U.S. companies, amid an intensifying dispute between the two countries over food safety.

Frozen chicken meat from Tyson was found to contain salmonella, China's General Administration of Quality Supervision, Inspection and Quarantine said in a statement posted on its Web site on July 13. Frozen chicken feet from Sanderson Farms Inc. had residues of feed additives and anti- parasite drugs, the regulator said.

China, the world's biggest exporter of consumer products, is under pressure to strengthen regulations after a series of scares ranging from contaminated toothpaste to drug-tainted seafood. The government executed its former chief drug regulator on July 11 for taking bribes in a crackdown on fake medicine.

``This is going to increase tension between the two countries and may lead to more finger pointing,'' Zhang Tianbing, a principal at consulting firm AT Kearney Inc., said in a phone interview from Shanghai. ``The U.S. government will likely react to show that they are protecting American interests.''

The U.S. complained about the safety of Chinese food products after toothpaste and drugs linked to Chinese producers were blamed for deaths in Latin America. Melamine, used to make plastics, was found in pet food blamed for killing cats and dogs in the U.S. this year.

``We have received no notice from the Chinese government about this matter,'' said Libby Lawson, a Tyson Foods spokesman. ``We will work with the U.S. and Chinese governments to get this matter resolved.''

Imports Rejected

China on June 26 rejected imports of U.S. orange pulp and dried apricots, saying they had exceeded limits for bacteria, mold and sulfur content. On June 12, China destroyed a shipment of rancid ant-infested U.S. pistachios, and on June 8 said three U.S. health supplements and a brand of raisins failed inspections.

``The move to halt these imports may cause the U.S. to retaliate by adopting similar measures on food imports from China,'' said Guo Huiyong, an analyst at Beijing Orient Agribusiness Consultant Ltd. in Beijing. ``If that happens, it will hurt trade relations between the two countries.''

No Ribs

The Beijing-based bureau also halted shipments of frozen pork ribs from Cargill Meat Solutions Corp., a unit of Cargill Inc., for 45 days starting July 5, for the company to ``correct'' the contamination, according to the statement.

``The substance they apparently detected is approved by the U.S. Food and Drug Administration for use in the United States,'' Mark Klein, a Cargill spokesman, said in a telephone interview from Minneapolis yesterday. ``It has not yet been approved in China, but my understanding is the manufacturer of it is working on an approval.''

He identified it as ractopamine, a growth promoter that's fed to pigs.

Tyson is the world's biggest meat processor, and Cargill is the largest U.S. agricultural company.

Pork prices in China are surging on a supply shortage linked to higher grain prices and the spread of an outbreak of the so-called blue-ear disease that has afflicted 143,221 pigs and killed 39,455 as of July 10, according to a statement by the Ministry of Agriculture yesterday.

Prices may continue to climb this year as the supply shortfall isn't likely to ease in the short term, the state-run Xinhua News Agency reported yesterday, citing an interview with Huang Hai, an assistant minister at the Ministry of Commerce. "(snip)


leading to a probable conclusion that the US congress will move ahead with enacting trade sanctions against China before the end of the year ...



(snip)"American economist Stephen Roach believes there is a strong chance the United States will impose trade sanctions on China before the end of the year.

"The biggest challenge facing the world economy that I can see is the trade protectionism that is building up between the United States and China," he said in an interview with Xinhua during a visit to Beijing in his new role as chairman of Morgan Stanley's Asia operations.

Roach has testified in the US Congress three times from February to May on US-China trade issues. "This is very rare. It shows me that the American Congress is very serious about taking actions against China," he said.

The Chinese government protested solemnly on Friday against the "indiscriminate and automatic" detention of some of China's aquatic products by the United States, the latest in a line of food safety issues that have arisen between the two countries and one that Chinese analysts feel might be a prelude to a twist in the China-US trade ties. "(snip)


All of this was prophecied by Economist Jim Willie 3 years ago, thus this vintage piece may also hold other prophecies that will soon be fulfilled ...



(snip)"The upcoming conflict with China will be played out in three primary areas. Labor markets will respond to the ongoing hemorrhage of job loss, with gradually more violent actions. Credit markets will gradually be used by China to retaliate, thus rendering the USA more alone in intervention initiatives. Supply chains of a wide range of commodities will be secured by China, thus bypassing the marketplace, and rendering us more isolated. Implications to all three are dangerous and huge, but mostly under-estimated by our crack team of economists. The US manufacturing base has been systematically dismantled. We as a nation have fostered the growth of the Pacific Rim for three decades. The fruit of this policy inside the USA is increased poverty, a shrinking middle class, and a frightening rise in debt in offset to the wealth lost.

We most definitely cling to the belief that service is higher in the evolutionary chain, superior to the dirty industries. However, they are both important. The basis of wealth creation is added value, certainly more key to the manufacturing process. Services usually support the process of making products, farming foodstuffs, or mining materials/metals. Whether from the offshore dispatch of our manufacturing plants, or from the outsourcing of service functions, jobs are lost inside the United States. Years ago, the US Economy would retain some comparative advantage even as the mfg sector suffered erosion and abandonment. We retained the design function, steeped in intellectual property. We held firm with much of the management functions, with distribution, with marketing, even some assembly. We have never had any trouble owning the retail function, THE BOTTOM OF THE ECONOMIC FOOD CHAIN."(snip)

(snip)"The USA mistakenly believes that we dominate since we possess and control the open market. Not so, not even close. Structural imbalance carries with it strange consequences. The US mfg output has practically vanished, as in totally disappeared. We cannot export electricity and refined gasoline, the mainstay of our national mfg base. If conflict erupts, how can the USA turn to our domestic alternative when we have none? The principal vulnerability exposed by our China trade lies in the credit market. The USA has become hopelessly dependent upon massive capital import. What used to be only $1.5 billion in required capital per day has risen to a needed $1.8 billion per day [now $3 billion per day in 2007- sic]. Credit supply in no way offsets the [American - sic] dependence upon Asians for manufactured finished products. IT MAGNIFIES THE RISK. This can be argued in much greater detail."(snip)