HONG KONG — At a time when the United States — and now Europe — is acting to rescue financial institutions such as Bear Stearns, Merrill Lynch and AIG, it is interesting to note that Chinese authorities are offering a hand to distressed companies caught in the contaminated milk scandal.
According to the official Xinhua news agency, the Chinese government is implementing an emergency rescue plan to subsidize dairy farmers suffering from shrinking demand since the scandal.
Provincial governments, too, are taking action. The Inner Mongolian Autonomous Region government has come up with a $14.6 million rescue package to aid two of the country's largest dairy companies, the Yili Group and the Mengiu Group, and reduce their tax obligations. Subsidies have also been promised by governments in Hebei, Shanxi and Liaoning provinces.