By Larry Romanoff, August 15, 2022
This is a very strange thing. In decades of exposure to Chinese people and in nearly 20 years of living in China, I still cannot understand this nor have I found anyone who can explain it to me. I will provide first a bit of background.
It’s no secret that Chinese factories still turn out a large volume of lower-quality goods, although these are not always done the way we would imagine. There are no Chinese salesmen coming to the US to offer Wal-Mart cheap, throwaway frying pans. In real life, Wal-Mart, with its massive purchasing power, sets in advance the technical standards for every product appearing on its shelves. They decide the quality of the metal, the coatings, the fasteners, the quality of the paper for the packaging, everything, then they travel to China to find a factory to produce that specific item at the lowest cost. And they will beat a factory on the head with a stick for a reduction of half a cent. So, for most of the Chinese junk you see in the supermarkets, don’t blame “China”; blame Wal-Mart or others similar. Factories in China are in business to produce whatever a customer wants and will pay for.
Having said that, there is still a remainder of low-quality goods being made by low-quality factories hiring low-quality people. I suppose that’s life. Maybe it exists in every country, though Germany might be an exception.
At the top end, China can produce goods of any kind to the highest standards necessary. Almost all the famous European luxury brands have their products made in China, including LV and Mercedes-Benz, and the quality is outstanding. So there are indeed factories in China that can make truly excellent products, second to none.
Chinese factories make wings for Airbus. I think we can assume the manufacturing standards for these are a bit higher than for the frying pans at Wal-Mart. As well, China designed and manufactured its own moon lander and Mars lander, and they worked flawlessly. Even if you want to pretend that China “stole” the IP for the landers from the US – which they didn’t – looking at a blueprint and actually landing and roving around on the moon, are two very different things.
So, Chinese factories are a very large mixed bag that can produce almost anything to (apparently) almost any quality standard necessary. And in all of this, there is no particular “buyer beware” caution. Generally, you get what you pay for; higher quality means higher costs and higher prices. No secrets there.
But it is in this that I find a strange disease I cannot understand. I will explain.
In a leather shop in Haining we have a long discussion with the owner to make a leather jacket. We settle on all the details, the price, the timing, and all goes well. The jacket is produced on time, and it is lovely. Beautiful leather, nicely crafted, great stitching, all the cute little pockets. Everything is as it should be, and the jacket wasn’t cheap; many thousands of RMB to produce what was wanted. But the owner thought he would save one dollar and use a really cheap zipper that breaks after a week, and the lovely new jacket is useless until someone replaces the zipper.
We have a lovely new pair of shoes, custom-made, with very fine leather and immaculate craftsmanship. Also very expensive; several thousand RMB. But the owner decides to save ten cents and installs the cheapest pair of shoelaces he can buy. And of course they break the first time they are used so the new shoes are useless.
We have a pearl farm assemble a string of pearls that is remarkable for the matching of the colors and the quality of the pearls. Color is a difficult thing because hundreds of pearls can be almost – but not quite – the same exact color, so a good farm will sort through literally thousands of pearls to find 50 or 60 that are identical. And the pearls themselves are exquisitely round and flawless, the string again costing in the thousands. But the manager decides to save twenty-five cents and will install the cheapest clasp he can buy. And of course, it breaks after the second use.
I could go on, but you get the idea and you understand the problem. I have seen this in so many categories, where a very fine and expensive product is made to high standards and using the best materials, but where one or two small details are sacrificed that spoil everything. And it isn’t rational. Why, on a $3,000 jacket, would you want to save $1 on a zipper? Why, on a $5,000 string of pearls, would you want to save 25 cents on a clasp? Why would you want to save ten cents on the shoelaces for a $700 pair of shoes?
It is the irrationality that puzzles me. It makes no sense. In any product, we generally use a common quality standard for all components. We don’t pack costume jewelry in a $50 box, and we don’t put a $25,000 wristwatch in a Taco Bell paper bag. Except in China.
Because this seems widespread, or at least not uncommon, I categorise it as some kind of unnamed disease. I don’t think it’s contagious and I don’t believe it’s hereditary, but it isn’t exactly rare, and I am completely baffled as to the cause. The consequences are not fatal, but they are certainly annoying. I cannot fathom the thinking that must underly these actions and, as I said above, I haven’t found anyone who can explain this to me.
In the end, quality is in the details, but this concept seems to be missing in some portion of Chinese manufacturing. I have a suspicion this trait is related to what we might call ‘old mindset thinking’ from the nation’s poorer days. If so, I would expect this to change rapidly because the new generation is quite demanding on quality, and surprisingly (to me) unforgiving. A few years back, P&G in China made the mistake of surreptitiously degrading the quality of many of their products while leaving prices the same. Chinese consumers detected the degradation almost instantly and abandoned P&G in droves, flocking back to domestic products they felt offered better value. P&G have been struggling in China ever since. The honeymoon is certainly over for foreign companies in China and I believe the same unforgiving attitudes will now apply to domestic firms.
Mr. Romanoff’s writing has been translated into 32 languages and his articles posted on more than 150 foreign-language news and politics websites in more than 30 countries, as well as more than 100 English language platforms. Larry Romanoff is a retired management consultant and businessman. He has held senior executive positions in international consulting firms, and owned an international import-export business. He has been a visiting professor at Shanghai’s Fudan University, presenting case studies in international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai and is currently writing a series of ten books generally related to China and the West. He is one of the contributing authors to Cynthia McKinney’s new anthology ‘When China Sneezes’. (Chapt. 2 — Dealing with Demons).
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