ABSTRACT
This chapter examines the evolution of food and drug safety regulation in China, with particular attention to the failure of the regulatory institutions to effectively manage the risks involved in the drug and food manufacturing, marketing, and consumption. A case study of the 2008 Sanlu milk scandal highlights the extraordinary challenges China faces in developing a sound and effective regulatory framework. Economic regulation emphasizes the pure economic relationship among producers and between producers and consumers, while social regulation focuses on the health and safety problems created by producers' economic behaviors. As the experience of regulatory state building in the US and Europe has suggested, while government regulation is ultimately the result of the development of a market economy, its effectiveness also hinges upon the state of political institutions, which includes the level of political participation, civil society development, and the rule of law.
