Monday, August 27, 2007

Chinese Having a Problem with "Made in China"

by Thomas Huang

"Made in China" is in trouble. From tainted foods to toxic toys, the biggest markets of China's hundreds-of-billion-dollar exports are getting angry with the once-tempting bargains. Yet the most vehement critics of Chinese-made products are perhaps not the "poisoned" Americans, but Chinese themselves.

Senator Hilary Clinton's exuberant yelling at the Democratic debate no doubt resonates with the thoughts of many bothered Americans: "I don't want to eat bad food from China ... or have my children having toys that are going to get them sick!" Of course, Hillary craves for union votes more than anyone else, and at this point, there is really nothing more important than exculpating herself from pro-corporate-interest charges that her rivals (especially Mr. Edwards) had dubbed on her. For that purpose, China, the nemesis of American manufacturing industry, is just a perfect target to pour the blame on.

The criticism to Chinese goods by Senator Clinton and other Democrats comes at a time when the problems of China's products are getting increasingly publicized under international spotlights. Yet all these come late. Defective and counterfeit products proliferated as China transformed from Mao's centrally planned economy to a market-, profit-oriented one. While quality standards of China-made products are raised as the Chinese manufacturers grow more experienced, the problem of lacking effective regulation persisted. In 2003, China's official media, CCTV, launched a weekly news report on consumer goods safety. The Chinese public was shocked at the scary images of nasty scenes in illegal food workshops and contaminated (possibly biohazardous) cotton in apparels and toys, starting to worry if the dishes they just had for dinner are doing anything bad for their health. As a result, similar news investigations flourished on TV channels across the country to meet the curiosity of the populace;
earlier this year, in a quest for ratings, a reporter from Beijing even faked a story of "Baozi (a stuffed steamed-bread) made from cardboard-boxes."

So Chinese have this complaint of defective products way before the problem catches the attention of international buyers. Ironically, the reason, at least partly, is that the exported products from China are already way better than the ones sold in domestic markets, because importers from abroad typically care more about quality control than Chinese domestic retailers. Some manufacturers in China even advertise their products as "export grade" to proclaim quality excellence even when they sell them within the country. Still, lower standards in general hurt consumers' faith in the products both in and out of the country. The Chinese complaints were highlighted in the public's responses to a news article of China's official news agency, in which the journalist questioned the Western criticism to Made-in-China products as politically-driven plots, citing statistics from the Japanese government's import inspection agency to demonstrate that exported foods from America are no better, if not worse, than the ones from China in terms of safety-standard violations rate. The points in the article are not totally untenable, but, contrary to the expectation that the Chinese would unite behind their nationalistic pride and say no to foreign critics, responses in the commentary systems of major news websites almost unanimously denounced the article
as self-deceptive lies, supporting the outside critics that resonate with their long-time dissatisfactions.

It is hopeless to count on governments alone to crack down on irresponsibly made products. But there are things that government can do. Tougher measures on importer- and retailer-liabilities may help put a brake on the race-to-the-bottom-price that comes at the expense of ignoring safety, even if that means taking a few more nickels from the shoppers' wallets. One thing that the policy-makers must understand is that the foreign importers have much larger bargaining power than their Chinese counterparts thanks to the formers' larger orders. Governments cannot monitor every single order; companies can.

Nonetheless, contrary to the description in protectionist fairy tales about "the prince and princess lived happily ever after without cheap Chinese goods," the developed world may have a hard time paying for low-tech consumer products, had there no deals with countries like China (both the PRC and ROC), Vietnam, Thailand and Indonesia, which are all more or less subject to similar blames. China taking the most is simply a reflection of its lion's share in manufacturing the goods in the first place. Now the problem is just how to make them safe to touch, to feel, and perhaps, to lick.

*Note: Unless specified, "China" refers to the territories and government of the People's Republic of China, not the Republic of China on Taiwan.

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