Exporters between rock and hard place


It is risky to defend an unpopular cause, such as the recent product scares involving Chinese exporters. There is an old saying that epitomizes the ideal response: "If you made the mistake, go correct it. If not, take it as a warning."
Things are more complicated in reality. Every case is unique. You don't know where the buck should stop. But that is something against the nature of journalists ready to spot a trend out of a few isolated incidents.
If you delve deeper, a product defect could come from one of several origins: it could be a lapse in design, a blunder in manufacturing, or even incompatible standards. Within the realm of manufacturing, a failing could be an honest mistake, a slip-up, a systematic attempt to cut corners, or a lack of quality control so pervasive that nothing can be guaranteed.
It is not surprising that, of the large amount of products shipped from China, a small percentage is tainted with quality deficiencies. Quality control programs such as the six-sigma are designed to reduce the rate of defects. No manufacturer can guarantee that everything he produces can be totally safe from flaws.
I've used half a dozen notebook computers since the product category came into being, and they were all big-name brands. Without exception, they all failed at one time or another. If I draw a conclusion from my experience, I should probably never buy another notebook.
Sound ridiculous? That is the same as campaign of "China-free" labeling, meaning the product has no parts whatsoever made in China, and therefore with no quality problems.
Granted, China has a long way to go to improve its quality management. But we should be fair that it has also come a long way in the past 30 years. Like the economy itself, the product quality of a developing country usually starts at a low level and moves up the ladder. That was true of both Japan and South Korea.
All this sounds like a lame excuse to defend one's own country, right?
Actually, I'm very much in favor of consumers, both domestic and foreign, constantly pounding manufacturers for quality improvement. The bottom line: no product should be allowed into the market that may bring harm to the consumer.
That said, I must add a word for Chinese manufacturers who sell abroad. I've talked to many who said they are caught between a rock and a hard place: They want to raise quality standards, but at the same time they are under extreme pressures to lower them.
The pressure comes from Western buyers and their agents, who cut prices so low that profits diminish and evaporate. Now China has also been accused of dumping. But nobody wants to sell low. Nobody wants to work all year round and earn nothing, or even lose money.
You'll say, "It's a free market, and nobody is forcing you to sell at that price." That's right, but as the laws of economics indicate, when buyers are big and powerful while sellers are small and replaceable, the latter are not really in a position to bargain. You are lucky if you get an order and keep the factory humming and the workers fed. Sometimes you'll have to take a shipment as free or heavily discounted samples that would hopefully bring profitable business later.
Businesses exist to make money. When buyers overpower sellers into accepting a price that eliminates a reasonable profit margin, they are essentially accomplices in a scheme to play fast and loose in quality.
There are big businesses that prefer an ethical facade and assign the dirty job to trading companies. However you play it, if you cut prices as if cutting throat, you should expect others to cut corners in quality.

—The Daily Mail, China Daily news exchange item