Self-Regulation Functions in Chinese Industry Associations: The Case of the Sanlu Incident

Industry associations are NPOs formed of enterprise members; they are an important bridge and node linking enterprises, society and the government. Though industry associations have many functions, the Sanlu incident made it clear how self-regulation is among the most crucial of its functions. Over the course of this case study we find that although industry associations have existed at each link of the production and marketing process for dairy products, a holistic, functional failure at self-regulation contributed greatly to the whole dairy industry's loss of public accountability. In order to guarantee the well being of the dairy, food, and even manufacturing industries, they will need to establish a supervisory system combining both governmental supervision and industry self-regulation.