“Killing the chicken to scare the monkey.” It is a well-worn Chinese proverb that means a stern punishment in public serves as a warning to everybody. And it is an adage multinational managers operating in China, especially those at Walmart, should learn.
The US retailer has fallen foul of authorities in Chongqing over the mislabelling of ordinary pork as organic, with the result that 13 Walmart stores in the south-west city were closed for a fortnight and two of its store managers were arrested. On Monday, Walmart announced its chief executive for China and its top executive for human resources in the country were resigning “for personal reasons”.
The incident has put the company right at the heart of Chinese government efforts to improve food safety this year after several scandals. It has also entangled it in the colourful politics of Chongqing, whose powerful regional party leader Bo Xilai knows a large, populist target when he sees one.