“Made in China”: The Negative Perception of China Direct Buying– Part 3

We recently started a blog series on the perception of Chinese goods being of poor quality (See Part 1 & Part 2). But is this a myth or reality? In this week’s segment, we’ll delve deeper into supply chain management in China and explore the source of this notion and its impact on the overall perception of goods made in China.

Figure 1

Although China has experienced remarkable growth over the past 40 years, it has also acquired a reputation as being a source of poorly-made manufactured goods. Where does this perception originate from? Perhaps one reason for this negative view of “Made in China” products is due to the history of China’s primary manufacturing output being low-value-added goods such as apparel.

Since China became known, initially, as a source for these types of low-cost goods, its competitive advantage was thus in low prices, and in turn, the idea developed that you “get what you pay for.” However, as we can see from Figure 1 above, by the first decade of the 21st century, Chinese manufacturers and exporters had vastly increased the diversity of their production and also expanded their technological capa­bilities.

So, if the Chinese were able to de­velop their production to accommodate more advanced manufacturing tech­niques, capacity and lack of technology clearly were not at fault. The fact is, the perception of poor quality was largely precipi­tated by a series of consumer product safety issues involving Chinese goods that peaked around 2007, leading to a string of bad press by global media outlets. In 2007 alone, a host of Chinese products were recalled as a trend that had been growing for a decade and finally reached a climax.

According to the U.S. Consumer Product Safety Commission (CPSC), in 2007, 67% of all consumer product re­calls, and 98% of product recalls from the toy industry, were of goods that had originated from China. As we can see in Figure 2, serious health and safety concerns were being raised by these products, with lead being the primary cause for concern.

Figure 2

Some of the most publicized recalls of 2007, also known as “The Year of China Re­calls,” include the following:

    1. Adulterated pet food with ingredients that were found to give renal and heart fail­ure to animals. The product resulted in a large number of animal deaths.
    2. Extensive Milk product recalls due to melamine contamination.
    3. Toothpaste containing diethylene glycol causing kidney failure.
    4. 450,000 radial tires for pickup trucks, sport utility vehicles, and vans being re­called by the U.S. National Highway Traffic Safety Administration.
    5. A series of toy recalls including:

-Marvel recalled approximately 175,000 Curious George toys and 51,000 pairs of children’s sunglasses with evidence of lead poisoning.

-Thomas the Tank Engine toy train was recalled due to paint that led to lead poi­soning.

-Mattel recalled 18.5 million various toys for lead poising and choking hazards resulting in the company issuing 2 recalls within 2 weeks.

-‘Toys ‘R Us’ recalling crayon sets due to fears of lead poisoning.

These and other numerous recalls of Chinese goods played an essential part in the perception that now plagues Chinese manufacturers and businesses sourcing from China. However, as we all know, our failures are part of our overall success. These recalls eventually lead to improved standards and quality in the supply chain management in China. Next week, we will explore these new standards and quality ethics.

Written by Buck Perley
Research by Bonnie Roche


Editor’s Note: This blog was originally published in 2012.

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