Drainage Oil From Another Perspective

The case of drainage oil from China maybe old news for some readers but it is a new one for me, having heard about it from a friend last week. I think that it is a case worth mentioning if we are to consider that China’s food industry continues to draw flaks. However, I would like to end this post with some thought-provoking statements.

For those of you who need a refresher or have never heard about this case, drainage oil is a term used to describe used cooking oil that is poured into the drainage. Rumor has it that some oil recyclers literally collect them from the drainage, process and then sell them back as recycled cooking oil.

According to the media, this is a serious problem in China but is it really true? Could it just have been a case that is blown out of proportion in light of the negative publicity surrounding China’s food industry? If this idea of recycling cooking oil from the drainage has been carried out in the developed countries, would it have been viewed negatively? Would it instead have been singled out as an innovative technique?

Will ASEAN Lose Out From The Trilateral FTA Between China, Japan and Korea?

Sometime ago, China, Japan and Korea finally agreed to kick-start talks that would lead to a Free Trade Agreement (FTA) between them. This move brings about two contrasting views. For the optimists, it shows that the 3 countries are finally ready to put behind their historical enmity in the name of economic growth. For the pessimists, particularly those that believe in ASEAN centrality, it is the beginning of the end of ASEAN’s role in providing neutral ground for the 3 countries to negotiate and engage one another, especially if bilateral communications on some matters are close to impossible.

On the economic front, the pessimists fear that the expanded market size of this FTA would reduce ASEAN’s competitiveness when it comes into being. I would like to argue the opposite. China is such a huge market that it does not really need to add Japan and Korea’s population to its investment attraction strategies in order to attract more investments. In other words, firms that find China as a prospective investment location would not have waited until now before making their moves. They would have done so long time ago. There is certainly a value for Japan and Korea use the expanded market size to attract more investments but given the high labor costs in both countries, I doubt expanded market size is a strong pull factor by itself.

Then, there are those who said that ASEAN may be left out of the East Asian fortress since the FTA does not involve them. But this is an unlikely event since ASEAN has arguably pre-empt this by having FTA with each of them. I will also argue that the regional production networks that have been developed and nurtured over the years is not something that can be altered overnight, more so if there is no basis to do so at all.

Last but not least, the talk is only about to start and most definitely has not yielded anything tangible. For all the commotion, it may end up being another FTA that is trade-light and more driven by politics rather than economics.