Tuesday, June 26, 2007
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China Inc. is developing a bad brand image
The growth of health and safety concerns about Chinese imports is not fading away into the night.
A fatal auto accident in Pennsylvania has stirred concerns about another potentially hazardous Chinese product in wide use in the U.S.: tires.As a country develops and moves up the consumer supply chain, they generally acquire a reputation for making high-quality goods (think Japan and South Korea). What's interesting is that China seems to be moving in the opposite direction.
I have no doubt that U.S. industry associations will hype consumer health and safety fears to serve their own interests. This doesn't mean they're wrong, however.
posted by Dan on 06.26.07 at 09:14 AM
Correlation vs. Causation, etc.
At this point, all of this is anecdotal. As you said, it is most likely being brought to the forefront out of the self-interest of industry leaders. China is our largest exporter, and the vast majority of those exports being products that are very price sensitive. Would low-quality, low-price Chinese goods be any less safe than their low-quality, low price American counterparts? I'm not too sure. Obviously, empirical data is needed. But right now, these anecdotes scream of protectionist thinking.posted by: Chris Thomas on 06.26.07 at 09:14 AM [permalink]
I tend to agree with those who argue that it's simply protectionism.
Nevertheless, it appears to me that we're in that transition period where the appropriate public or private regulatory/legal system in China is weak enough that there is profit to be made in being dishonest or shoddy. My guess is that it will last no more than 10 years, but that's cold comfort to someone whose tires came apart on the interstate.
To be nativist for a paragraph, I have to be irritated at the doubtless American MBA-planned relabeling of Chinese products with English names like "Westlake, Telluride, Compass and YKS". More episodes like this will encourage mandatory labeling laws that will be bad for China and bad for the US, in the long run.
Ford Motor estimates the Chinese counterfeit $1B a year of "Ford brand" parts.
Worse yet, Ford gets the consumer flack when the poor quality parts fail.
Combine poor quality with phony labeling and we have a major consumer problem.posted by: save_the_rustbelt on 06.26.07 at 09:14 AM [permalink]
I do not think China is moving backwards in terms of quality, I just think the timing of our imports means many of the problems are coming to roost now. In most of the cases I have seen, the US company is at least partially to blame and it APPEARS to be the case here as well. Did the importer check the construction of the tires before they left the plant in China? How many tires did it check?posted by: Dan on 06.26.07 at 09:14 AM [permalink]
Bad brand name? Wait till you read the response from Hangzhou Zhongee Rubber Co.posted by: Aruna Urs on 06.26.07 at 09:14 AM [permalink]
Unlike China, Japan since the beginning of the 20th century, has lots of experience in competing with western economies, taking advantage of western technologies and techniques and in developing its own.
China has been retaliating by rejecting food imports from France, Canada and the US citing failure to meet Chinese product safety standards.
The latest is that China closed 180 food factories because of the use of formaldehyde, illegal dyes, and industrial wax found being used to make candy, pickles, crackers and seafood.
Gee, what could all this mean?posted by: bluhawkk on 06.26.07 at 09:14 AM [permalink]
Also, I can't help but notice that the text on the chopstick wrappers could use a good copy editor.posted by: MH on 06.26.07 at 09:14 AM [permalink]
I think China IS moving backwards, because of the lowering barriers-to-entry...
With China being a cheap, unregulated place, the barrier to entry for creating a factory/company is far lower than everywhere else in the world.
With the ability to cheaply create a manufacturing company identity, it becomes far less costly to cut corners as your "reputation cost" for being a bad supplier is low.
EG, the tire company in china which cut corners is now probably "out of business" and back under a new name, perhaps at a new location, and probably doing the same corner cutting and spec-cutting all over again.
The biggest potential for long-term and perhaps irreversable damage to the "Made in China" brand (in the US anyway) is any suspicion of harmful pet products, namely food but also toys.
That Americans love their pets is the greatest of understatements. If China wanted to secure brand loyalty for generations, they should make every effort to lead the world in quality pet food and products. Everything else will be forgiven...posted by: James on 06.26.07 at 09:14 AM [permalink]
Use of the words "protectionist" and "protectionism" is code for "I make money in a field which ships jobs to/argues-on- behalf-of-shipping-jobs-to China/India; don't mess with my gravy train".
If mandatory country-of-origin labeling laws get in the way of the Predator Class' profits, then too damn bad. What? The consumer doesn't deserve to know the truth about where a product was manufactured? Good grief.posted by: Glogger on 06.26.07 at 09:14 AM [permalink]
(reposting because I got dropped)...
In THIS case, the tire comany was and is actually well established, and is still around and contesting the charges...
In retrospect, I think this case is actually a greater symptom of the "wal*Mart" race to the bottom (where because margins are squeezed so much, there comes a point where just improving efficiency is not enough and one needs to cut corners to maintain profit), rather than China Inc in particular.
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