The Beijing Olympics did wonders for the global image of “brand China”. But now, a month later, a toxic milk scandal has reminded consumers around the world – not to mention foreign companies eager to do business in the country – of potentially lethal flaws in the Chinese industrial model.

At least three infants have died and 53,000 have been sickened by Chinese milk contaminated with the industrial chemical melamine. The scandal highlights the risks that attach to the “made in China” label – for consumers and for the companies that sell to them.

Beijing is painfully aware that if it wants to move up the value chain of global production – and deliver the improved living standards its people expect – it must tackle endemic product quality problems. Despite recent export scandals over lead paint in toys, contaminated pet food and tainted dumplings, regulatory oversight of manufacturing in China remains rudimentary.