By  on October 24, 2008

BEIJING — China is still digesting Wednesday’s announcement from Wal-Mart Stores Inc. that it plans to ramp up environmental and social compliance standards from suppliers here.

Among domestic media, there was a smattering of negative reactions to the news, since Wal-Mart’s move is seen boosting local manufacturers’ costs. Although state-run media agency Xinhua excluded any type of local reaction from its coverage — even touting Wal-Mart’s potential business prospects in the southern city of Chongqing — other media outlets took on a critical tone.

Thursday’s Shenzhen Commercial Daily ran a story under the headline: “Wal-Mart’s Suppliers to Raise the ‘Threshold,’ Announced ‘Harsh’ New Agreement” before going on to write that “tens of thousands of Chinese suppliers are up against the world’s largest retailer Wal-Mart’s ‘harsh’ new plan.”

The article garnered a few responses on Sohu, a popular Chinese search engine. One Beijing resident applauded Wal-Mart, while a reader from Foshan city thought the higher demands were good, but lamented the fact that an American company was shifting the cost burden to suppliers.

A headline in Thursday’s edition of The National Business Daily posed the question: “Will Wal-Mart’s Standards Drive Suppliers to Profitless-ness?” Its story went on to characterize domestic suppliers as victims of Wal-Mart’s global image in the wake of increasing attention to food and product safety in China. The paper alleged the retailer is courting consumers’ trust at the expense of Chinese manufacturers’ already strained profit margins in a time of rising raw material prices and labor costs.

Suppliers are quoted as saying: “[When] supplying Wal-Mart, not raising prices is like waiting to die, while raising prices is like looking to get killed.”

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