Chinese Regulators Find Mobile Phone Batteries That Can Explode

serynade

July 6, 2007
Chinese Regulators Find Mobile Phone Batteries That Can Explode
By DAVID BARBOZA

SHANGHAI, July 6 — After concerns over pet food, toothpaste, seafood and defective tires, China may now have to cope with another consumer product disaster: exploding mobile phone batteries.

Chinese regulators in southern Guangdong Province, one of the world’s biggest electronics manufacturing centers, said this week that they had found Motorola and Nokia mobile phone batteries that failed safety tests and were prone to explode under certain conditions.

The batteries were said to be manufactured by Motorola and the Sanyo of Japan’s Beijing operation, and were being distributed by companies based in Guangdong Province, which is near Hong Kong and is one of China’s biggest export centers.

It is unclear whether any of the substandard and hazardous batteries entered the export market.

The announcement came just a day after China’s state-controlled news media reported that in June a 22-year-old man in western China was killed after his Motorola cell phone exploded in his shirt pocket.

The man was reportedly a welder and the heat associated with the job may have touched off the explosion.

Motorola and Nokia, two of the world’s biggest mobile phone makers, immediately denied links to the distributors of the problem batteries, suggesting they were counterfeit.

“All the batteries tested were not Motorola genuine batteries,” said Yang Bo-ning, a spokesman for Motorola in Beijing. “. They were fakes. Those companies are not our suppliers.”

Nokia officials said they were investigating the case and trying to determine whether any of the substandard batteries affected Nokia phones.

Nokia officials said they do not manufacture batteries in China and the company has no business ties with the Chinese distributors named in the safety tests.

“We are confident this is a counterfeit product,” said Eija-Riitta Huovinen, a Nokia spokeswoman in Finland.

But the discovery of the exploding batteries is already threatening to turn into another consumer product nightmare, and helping fuel mounting international concerns about the quality and safety of goods being made in China.

For years, China’s role as the world’s factory floor has seemed to usher in an age of lower and lower prices, and helped tame inflation around the globe — powering one of the greatest economic growths stories in history.

The dark side of that boom, however, has been a culture of counterfeiting or copying high-end western products.

Counterfeit products have been produced here since the country’s economic reforms began to take hold in the early 1980s, and everything from fake Gucci bags to counterfeit DVDs and Windows operating systems can to this day be bought on the streets of big cities.

But now, perhaps for the first time, cheap and sometimes counterfeit products from China are beginning to look hazardous and even deadly.

Exports of tainted pet food ingredients earlier this year triggered one of the biggest pet food recalls in United States history, possibly killing or injuring as many as 4,000 cats and dogs, according to American regulators.

Cough medicine laced with a mislabeled industrial chemical from China called diethylene glycol may have killed as many as 100 people in the Dominican Republic last year.

And a few weeks ago, an American company recalled about 450,000 Chinese made tires because they did not contain a key safety feature, which could prevent tire treads from splitting and falling apart.

The recall occurred after a lawsuit blamed the Chinese-made tires for an accident that resulted in the August 2006 deaths of two people in Pennsylvania.

The series of high profile recalls and public relations disasters for China also seems to be playing into the hands of China bashers, Congressional critics and big corporations worried about protecting their intellectual property.

China has responded in recent months with a massive effort to reassure global investors, customers and consumers at home.

Regulators have announced efforts to overhaul food safety regulations, to introduce a national recall system and to revamp the nation’s top drug watchdog.

In May, the former head of the State Food & Drug Administration was sentenced to death for accepting bribes and approving substandard drugs. Today, another high ranking official in the same agency also received the death sentence, though with a two-year reprieve.

And in recent months, China’s top watchdog agency dispatched over 30,000 inspectors on a nationwide sweep to find counterfeit and substandard foods, drugs and consumer products.

The government has all along insisted that most of its products are safe and are of high quality, and warned the media not to create a panic.

But the government has announced the results of some inspections, and they are startling: nearly 20 percent of the nation’s food and consumer products are substandard or tainted, the government said earlier this week.

Food is laced with industrial chemicals, formaldehyde, industrial wax and dangerous coloring dyes; baby clothes are contaminated with dangerous chemicals, children’s snack food is doused with excessive amounts of preservatives; and old food waste is repackaged and sold as new.

Worried about a backlash among western consumers, global corporations are now upgrading their own inspections, and worrying about the potential for a massive recall after the RC2 Corporation of Illinois announced that its popular Thomas & Friends toy railway sets were coated with lead paint. That forced the recall of 1.5 million toys popular with toddlers.

Companies are also preparing for a possible flood of class-action lawsuits.

“Big companies are doing two things: they’re considering alternative sources for products and ingredients from China, just in case China is closed off or American consumers reject their products,” says Gene Grabowski, a senior vice president at Levick Strategic Communications, a consulting firm based in Washington that advises consumer product companies. “And the more immediate concern is that a lawsuit would be filed, and so they want to have their legal liability situation in place and manageable.”

Back in Guangdong Province, along the southern rim of China, investigators are looking into how the substandard batteries made their way to the market and, because they appear identical to Motorola and Nokia goods, whether they could have entered the export market.

A spokesman for Motorola said today that after Guangdong provincial officials announced on Thursday that they had discovered substandard mobile phone batteries produced by Motorola, the company’s own scientists immediately conducted their own tests.

“We approached the Guangdong authorities and then did our own tests,” said Mr. Yang at Motorola. “These were not our batteries. There are lots of counterfeits. Every year we seize thousands of counterfeit batteries and counterfeit battery labels.”

Guangdong regulators could not be reached for comment. Sanyo officials also could not be reached late Friday.

Nokia and Motorola, however, say they are very concerned about the substandard goods, which appear to be counterfeits, particularly because their reputations are at stake in China, which has the world’s largest number of mobile phone subscribers at over 400 million.

“We take all issues involving counterfeiting very seriously, because counterfeiting has the potential to affect the good name and reputation of our products,” said Ms. Huovinen of Nokia.

Kevin J. O’Brien in Berlin contributed reporting.