The Pitfalls of ‘Made in China’
Globalisation heavily contributes to fast and easy communication, trade and business, yet it has its fair share of complications and drawbacks. The regulation and governance of international trade, business and investment has become increasingly difficult, leaving considerable space for damage, stemming from consumers buying products with latent defects.
Over the past decade, China has benefitted immensely by thoroughly utilising the advantages globalisation offers. The phrase ‘Made in China’ has polarised connotations attached to it. The reason behind this is the fact that China caters to all sorts of markets, ranging from price-conscious to quality-conscious consumers. Due to this reason, the country provides developed countries with high quality products whereas developing countries such as Pakistan receive extremely low quality products at cheapest possible rates.
Despite the fact that Chinese products undergo strict quality control checks in the western markets, recent scandals regarding the quality and safety of Chinese products prove that Chinese manufacturers also try to cut corners. China was constantly criticised for exporting contaminated seafood, pet food ingredients, toothpastes plus toxic toys and defective tyres. As the western media raised its voice against the defects of Chinese products, the quality of the commodities supplied to the developed countries improved and also managed to maintain its standards.
Li Yuanping, a regulatory official said, “99 percent of the food exported to the United States was up to safety standards over the past 2 years, which is a very high percentage.” This high figure further adds to the growing belief that poor quality products are distributed in the less developed countries, whereas the first world countries, with a powerful media in addition to health-conscious and educated consumers, receive high quality products and services.
In a nationwide survey, the Chinese government stressed on the fact that 80.9 percent of their food and other products met safety standards. However, the government refrained from providing any details regarding the extent to which the remaining 20 percent can be harmful for end-users across the globe. The government did accept the fact that baby clothing and baby formulas were unsafe, animal feed and fertilisers were contaminated and agricultural equipment was faulty.
Considering the extent to which western consumers worry over the negligible safety failure rates, consumers from the underdeveloped nations must be aware of the quality of Chinese products they consume. Despite the safety, durability and reliability issues, Chinese products are able to compete quite comfortably with local products in the Pakistani market. The fact is that Chinese products are inexpensive, which attracts consumers from low socio-economic segments. One cannot even blame these price-conscious individuals, who would willingly compromise on quality, thereby, favouring the rival Chinese market. Pakistani importers of Chinese products are also partially to blame as the massive inflow of adulterated products is a result of absence of strict quality controls which has led to almost 90 percent of Chinese products being of substandard quality. Pakistani law does not require a product to be inspected for a latent defect. It also does not warn local consumers of the possible harmful effects of buying defected products.
Despite these major issues, the get-richquick ethos has allowed the Chinese market to prosper and bloom over the years. There are other factors too which contribute to their immediate success. They ensure cheapest input cost by using low quality products. Moreover, they believe in mass production as it allows them to produce more goods with less expenditure. The cheaper prices combined with mass production, guarantees excessive sales. Furthermore, the Chinese do not spend their capital on research and innovation. Instead, since it is less risky to invest in uncertain technologies, they have mastered the art of copying and reproducing established brands at a cheaper price. They also refrain from spending excessively on advertising and marketing. The author of Poorly Made in China, Paul Midler, says, “Many manufacturers are not interested in making a quality product and building a long-term reputation.”
The trend of Pakistani markets being flooded with Chinese products began when Pakistan signed the Free trade Agreement (FTA) with China in November 2006. Although the agreement was supposed to equally benefit both countries, yet Pakistan’s trade balance with China remained in deficit for many years. The recent 23% increase in exports to China serves as good news for Pakistan.
Since the Chinese market is also flooded with low quality products, the locals largely depend on foreign products as they are much more durable and reliable. The popularity of imported goods soared up after the 2008 melamine-tainted milk scandal which killed 6 infants and left 290,000 others with severe kidney damage. Their inability to understand the significance of building a long-term reputation and the government’s inability to uproot illegal activities involving food and other products, has led to Chinese consumers becoming highly dissatisfied with their local products. The excessive dependence of the locals on foreign products creates a perfect scenario for Pakistani products to win the Chinese local market. Masood Khan, Pakistan’s Ambassador to China says, “If we have more exportable surplus, the vast Chinese market will be able to absorb our commodities and services.”