In a commentary published on the China Daily's website, Xinhua says there are systemic problems in the way the government deals with quality control and cites the leaky homes crisis as an example.
"One could argue the country is hostage to a blinkered devotion to laissez-faire market ideology," it said.
"With yet another trade imbroglio, this one Fonterra's botulism scare, surely it's time to ask the New Zealand government: Where's the quality control?"
The article says Fonterra might have come out of it with some credit if it had moved quickly to isolate the affected products.
"Surely one of the first questions must be why Fonterra apparently felt no legal onus to inform the public and the authorities sooner."
Prime Minister John Key told reporters he had only seen reports of the Xinhua article.
"That's the sort of risk we always open ourselves to in the event we have a problem like this - there are repercussions," he said.
Mr Key says he hasn't had any calls from Chinese officials about the contamination crisis.