The instinct to spare another person embarrassment is a noble one. To correct mistakes discreetly and save the dignity of the offender is virtuous. But saving one’s own face at the expense of others is universally regarded as despicable, and when the “others” are babies likely to sicken and die it is downright criminal. Yet the latter kind of face-saving is exactly what the protagonists in China’s current baby-milk scandal seem guilty of, and they are not the first to offend in this way. The Chinese way of saving face needs a thorough overhaul, and this crisis would be the perfect opportunity to set the reform in motion.

So far, four Chinese babies have died as a result of consuming melamine contaminated baby milk powder and more than 6200 are ill, including 158 with acute kidney failure. Those are the official figures, and the number is expected to continue rising. What continues to fall is confidence in the ethics of China’s industrial culture, its official overseers and its overseas partners.

All the sick babies were fed a formula produced by the San Lu group, which is based at Shijiazhuang in Hebei, the province surrounding Beijing. It contained a nitrogen-rich chemical generally used to make plastics. Melamine appears to have been added to milk by suppliers of San Lu to compensate for loss of protein from the watering down of milk to increase volumes. It is not clear from reports who did the watering, whether farmers or the dealers who collected it for the dairy company.

The scandal is intensified by the fact that San Lu received calls about sick babies in March, although it says tests at that time showed there were no quality issues. On July 16 the government of Gansu told the Ministry of Health about an unusual upsurge of kidney stones among infants who had all drunk the same brand of milk. On August 2 San Lu’s management told its board of directors about the melamine contamination. The board contacted authorities and a trade recall began on August 6, but a public recall started only last week, on September 11.

And that happened, apparently, only because San Lu’s New Zealand partner, Fonterra, which had known about the melamine contamination for over a month, finally asked the New Zealand government to take the matter up with Chinese authorities.

Fonterra, which has a 43 per cent stake in San Lu and three members on its seven-member board, says it had been trying to work within the Chinese system, advising a public recall but accepting its partners’ word that “they were not in a position to do it”. One can well believe that. The Olympic Games were imminent and the media were still under a two-year ban on bad-news stories. The fact that San Lu products are nearly all consumed in China -- its only export market is Taiwan -- made the cover-up more likely. The company typically sells its infant formula to Chinese mothers in poorer rural areas at up to one-third the price of competitors in richer urban areas. Profit margins are slim, creating an inducement to cheat. After all, only the lives and happiness of poor, rural people are at stake.

Now, thousands of parents agonise over their sick infants, some facing the possibility that a kidney ailment may condemn their only child to health problems for years to come. Others don’t know what to feed their babies, not trusting any milk powder products. Checks on other dairy companies have found melamine in 69 batches of infant formula made by 22 producers. These include the country’s two largest producers, Mengui Dairy and Yili Industrial Group, both of which have apologised to parents and customers. Milk powder has all but disappeared from shop shelves.

In the usual Chinese fashion, some heads are rolling. San Lu’s (female) general manager Tian Wenhua, a Communist Party member, has been fired and detained by the police; four milk dealers have also been arrested. The mayor of Hebei province’s capital, Shijiazhuang, where San Lu is based and four other city officials have been sacked over the delays in reporting the contamination. Beijing has thrown its weight behind a national inspection of milk products and 5000 inspectors are to be dispatched.

Some officials might indeed lose their heads. Last year, after widespread complaints at home and abroad about tainted Chinese-made food and medicine, the authorities executed a former head of the country’s food and drug safety agency for taking bribes. But these token gestures, drastic as they are, do nothing to solve the underlying culture of cheating and covering up. China is far too ready to sacrifice lives -- whether of the guilty or the innocent -- when what is needed is a true cultural revolution.

This is where overseas companies like Fonterra can play a vital role. The dairy giant’s chief executive Andrew Ferrier has excused its delay in sounding the alarm over San Lu’s formula milk by saying: “If you don’t follow the rules of an individual market place then I think you are getting irresponsible.” No, sorry, Mr Ferrier, there is a higher law than the market place, the law that human life is sacred and not to be put unnecessarily at risk, and making this clear to your Chinese partners is your greatest responsibility, bar none. In any case, saving face at the expense of human lives leads to a far worse “look” in the long run.

Companies and governments (New Zealand in April became the first developed country to sign a free trade deal with Beijing) have been falling over themselves to cash in on China’s economic boom. China has a huge market, cheap labour and a desire to extend its influence in the world. That is all very well, but influence, like free trade, is a two-way street, and unless companies like Fonterra can raise the ethical stakes in their dealings with the Asian giant, not only the Chinese but the global community stands to lose: face, yes, but even more its soul.

Carolyn Moynihan is deputy editor of MercatorNet. She writes from Auckland, New Zealand.