People purchase goods at a supermarket on November 9, 2011 in Jiujiang, Jiangxi Province of China.
People purchase goods at a supermarket on November 9, 2011 in Jiujiang, Jiangxi Province of China. - 
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From toxic infant formula to the widespread use of gutter oil in local restaurants, the Chinese have little confidence in their government’s ability to make sure their food is safe.

Shaun Rein, author of The End of Cheap China, says creating a "super agency" is essential to restore consumer confidence and address the current risks.

"Otherwise, the government is going to face severe social instability and dissatisfaction in the coming five years," says Rein. "People have the money, they have the education, and they’re no longer willing to accept it."

More and more middle class Chinese are buying imported milk formula, imported vaccinations for their kids, and imported food -- good news for American companies exporting food to China, but not so much for domestic companies.

Rein says a new Chinese equivalent to the FDA comes partly in response to falling revenue for domestic brands.

 

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Follow Rob Schmitz at @rob_schmitz