Fakes Stalk China's Booming Baby Formula Industry
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Baby Baozi - made in China, but raised on German infant formula. A deep distrust of local formula has Chinese mothers like Yang Liu scouring the globe for trustworthy supplies. These come from her cousin in Germany

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EDITOR'S NOTE: CONTAINS CONVERTED 4:3 MATERIAL Baby Baozi - made in China, but raised on German infant formula. A deep distrust of local formula has Chinese mothers like Yang Liu scouring the globe for trustworthy supplies. These come from her cousin in Germany (SOUNDBITE) (Mandarin) BABY BAOZI'S MOTHER, YANG LIU, SAYING: "In my mothers' group online, there are over 160 of us and only two use domestic formula. Another ten to twenty use foreign brands distributed through Chinese stores. The rest get it directly from overseas." With China's infant formula market expected to double to US$25 billion in the next five years, there's a lot of business at stake. Foreign formula makers like Nestle and Danone were targeted recently by authorities here for alleged price-fixing. The flight to foreign formula is rooted in a scandal in 2008 -- domestic formula tainted with industrial chemicals killed at least six babies and made hundreds of thousands sick. Since then China's milk powder imports have soared. And Chinese have emptied the infant formula shelves of foreign supermarkets, prompting governments like Hong Kong's to slap limits on purchases. (SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING: "Hundreds of new infant formula brands claiming to be imported have sprung up in China causing even more confusion for Chinese mothers." The state media has exposed made-by-Chinese brands that have falsely claimed to be well-known in New Zealand. Beijing also tightened regulations on imported formula in June, including banning repackaging of formula and requiring Chinese labeling. Agriculture consultant Rich Herzfelder. (SOUNDBITE) (English) AGRICULTURE CONSULTANT, RICH HERZFELDER, SAYING: "Some Chinese companies have bought small dairies in New Zealand. Then they take the milk powder from those dairies, they take it to Subic Bay or they take it to Hong Kong or even sometimes the Waigaoqiao free trade zone and they mix it with domestic powder and sell it as imported and so the government is trying to stop that." Baby Baozi's mother has secured enough German formula to last at least another year. But she's already thinking about the next stage -- milk. (SOUNDBITE) (Mandarin) BABY BAOZI'S MOTHER, YANG LIU, SAYING: "There are about five to six brands of German milk sold online in China but my cousin in Stuttgart has only found one of those in her local supermarket. I don't know why that is. Maybe the situation is similar to the infant formula. They say it's imported but it may not be. That worries me." As long as parents' worries continue, the hunger for imported formula - and the attempts to pass local products off as international - are unlikely to die down. ENDS ENDS