People’s Daily asks: Why isn’t high-quality Chinese manufacturing sold in China?

Thread Content

On page 17 of the People’s Daily dated December 2, 2016, People’s Vision published an article titled “Have We Become a ‘Low-Quality Area’?” 》, asking why high-quality Chinese-made products are not sold in China? The full text is published here for the readers’ enjoyment. As the end of the year approaches, another peak shopping season is upon us, with various promotional activities both online and offline being carried out in succession to stimulate people’s desire to shop. Among these, there are some phenomena worth noting: high-performance rice cookers manufactured in China are not sold in their place of origin ； A pair of sports shoes from a renowned international brand – bought after crossing the ocean – are more durable than those purchased domestically ； The quality of beef balls produced by domestic companies for export is one tier higher than that intended for domestic sales ； When foreign-brand cars of the same model develop quality issues and are recalled worldwide, \"China is the exception\"... Many consumers have found that for the same products or services, those available and purchasable in China tend to be of lower quality compared to those abroad. So, have we become a \"quality lowland\" in the global market? Can Chinese consumers enjoy the same quality? Where can we find more high-quality domestic supply? 1 Is it common for quality to differ between the inside and outside? Export and domestic sales involve two different standards and two production lines: first-class products are exported while second-class products are sold domestically; this seems to have become a \"practice\" in some industries in China” ； Some foreign brands apply double standards in the international market and the Chinese market, with quality differences between these two markets being a common occurrence. Basketball shoes bought abroad still work fine after a year of use, while those bought in China break after just two months – there’s really a big difference in quality. ”Xu Wei, a junior student at a university in Chaoyang District, Beijing, told reporters. Xu Wei is into basketball; he bought a pair of basketball shoes when he went abroad last year. Although they are a foreign brand, they were manufactured in China, and they’ve worked fine after being worn for a year. Upon his recommendation, a fellow player bought a pair of the same shoes made in China at the brand’s domestic flagship store. To my surprise, just two months later, the shock-absorbing cushion in my friend’s shoes finally stopped working. What is the difference in quality between sports shoes made domestically and those imported? Xu Wei conducted another more precise comparison: he first had someone buy a pair of basketball shoes from abroad, and then purchased a pair of shoes of the same brand and model from a store in China. After that, he played basketball by switching between the two pairs of basketball shoes; the shoes purchased in China started to show signs of wear after about half a year, while the shoes bought from abroad did not have any problems at all. “I have to say there is indeed some substance to this. ” Things like this are quite common. After making comparisons, many consumers have found that for certain products and services, the quality in the domestic market is significantly worse than that in foreign markets. This difference in quality is manifested in several intriguing phenomena: some high-quality products are manufactured in China but not sold domestically. Li Na, a resident of Yangpu District in Shanghai, went on a trip to Japan not long ago and brought back a rice cooker that is very popular there. After using it several times, she felt that this rice cooker was indeed superior to many rice cookers sold in China in terms of versatility and the quality of the cooked rice. The attentive Li Na noticed that the bottom of this Japanese-brand rice cooker clearly had a label saying “MADE IN CHINA”. “Can rice cookers made in China be bought in China? ”Li Na visited several large electrical appliance retailers in Shanghai, such as Suning and Gome, but did not find this rice cooker there. Mobile phones, rice cookers, clothing, shoes, food, smart toilet seats… Many of the products sold in international markets are of Chinese origin. Yet, a large number of high-quality products that are manufactured in China are not sold there but are instead sent directly to foreign markets. Chinese consumers who want to buy these products have to \"follow\" the goods abroad, incurring higher costs. For some products manufactured by domestic companies, the quality of those exported is one level higher than that of those sold domestically – Guan Jian, a resident of Luohu District in Shenzhen, often goes to ** to purchase goods, especially food. He found that **many fresh products such as vegetables, chicken, and pork in supermarkets come from the mainland, yet their quality is better than that available in the mainland market. Taking beef balls as an example, **the beef balls purchased have a better texture compared to those sold in domestic supermarkets. “The ingredients are nothing more than beef, pork, corn starch, etc., but the taste is simply different. ”Guan Jian told the reporter. Two standards for export and domestic sales, along with two production lines – first-class products are exported while second-class products are sold domestically – this has long been the \"practice\" in some domestic export-oriented industries. Taking the food industry as an example, data shows that the quality rate of China’s food exports remains at a high level of over 99%, while the quality rate of food sold domestically is around 90% following years of regulatory efforts. This difference of a few percentage points reflects to some extent the awkward situation in certain industries, where there are \"different standards, different requirements, and different quality levels\" on the international and domestic fronts. Some foreign brands practice a \"double standard\" in both the international market and the Chinese market – McDonald’s, KFC, Pizza Hut… These well-known fast-food chains that are quite compliant with regulations abroad become somewhat lax when they operate in China; they do not pay enough attention to food safety, and in recent years there have been numerous incidents related to food safety issues exposed. In 2014, Shanghai Fuxi attracted widespread attention for using large amounts of expired and spoiled meat as raw materials and supplying them to food chains such as McDonald’s, KFC, and Pizza Hut. When quality issues arise, foreign brands also adopt a very \"arrogant\" approach in China. In July of this year, IKEA announced a recall due to safety hazards associated with certain cabinet products; initially, the Chinese market was not included in this recall, but under public pressure, the problematic products for the Chinese market were eventually recalled ； In September, South Korean company Samsung announced that it would recall the “NOTE7” smartphones sold in the United States, Australia, and other countries due to battery defects, but not in China ； Japanese company Toshiba has carried out multiple global recalls of products such as laptops, color TVs, washing machines, and mobile phones that had quality defects, but it rarely pays attention to the Chinese market… \"In many consumer goods sectors, China is indeed currently in a situation where quality is poor.\" ”Zhao Ping, a researcher at the Research Institute of the China Council for the Promotion of International Trade, said that domestic consumers are paying increasing attention to quality, but there is a relative shortage of high-quality products available. The phenomenon of differing quality levels for goods and services between domestic and imported products further exacerbates the mismatch between supply and demand in the domestic consumer market. 2 Are “low-lying areas” just due to low standards? Low standards or a lack of detail are only some of the factors why consumer goods in the international market are better than those in the domestic market. Factors such as market demand, supply levels, and regulatory approaches also exert a combined influence. Some products are manufactured domestically but not sold there, as a result of companies’ decision to adjust supply based on demand. The reason some international brands are able to practice a \"double standard\" is the inadequate domestic regulatory framework. Rice is a staple food on ordinary families’ dining tables, but in recent years it has become something that domestic consumers purchase through overseas shopping, even paying high prices of several dozen yuan per jin to buy it from abroad. “Although taste is somewhat subjective, objectively speaking, there is indeed a difference in quality compared to the rice available on the domestic market. ”Liu Houqing, an expert in rice evaluation, told reporters that he had conducted comparative tests by opening a bag of domestic rice and a bag of Japanese rice, first checking the integrity of the rice grains; there were more broken grains in the domestic rice ； During washing, domestic rice contains a higher amount of starch; Japanese rice can generally be washed 2–3 times to remove excess starch, while domestic rice requires 7–8 washes. A bowl of white rice: why is there such a difference between foreign countries and China? “Standards may be a major reason. ”Liu Houqing said that in the rice industry, there are standards in China, and many of these standards are quite high, but they are not detailed enough. Many of the standards are based on production volume, focusing on ensuring sufficient supply rather than quality, and they can no longer meet the new demands of consumers. In Japan, there are clear standards for every stage of rice cultivation, from breeding and planting to harvesting, processing, storage, and sales. The main purpose of these standards is to ensure that the rice consumed by consumers retains its delicate fragrance. For example, protein content is an important factor affecting the texture of rice. In Japan, the protein content in rice is generally below 8%, whereas Liu Houqing conducted tests on various domestic rice brands and found that their protein content was usually relatively high, averaging around 9%, with some even approaching 10%. For another example, to ensure freshness, polished rice processed in Japan generally has only a 3-month \"best-before date,\" and such strict standards are difficult to meet in the Chinese market. “The standard is the threshold for compliance for all products on the market, and it plays a crucial role. ”Xu Jing, director of the China International Brand Management Center, believes that compared with some developed countries, the standards in many industries in China are relatively low or not detailed enough, which is a factor contributing to the emergence of \"low-quality\" products in certain consumer goods sectors: some products that are not up to standard abroad end up being considered qualified products in the Chinese market ； Products that meet the standards in some foreign markets have become high-quality products in the Chinese market. Standards are important, but experts generally believe that the differences in quality between domestic and imported products, as well as the fact that some high-quality products are not sold domestically, are the result of a combination of the following factors: Some \"Made in China\" products are not sold in China due to the current stage of development of the domestic market; these high-quality products are too expensive and therefore cannot find buyers in the domestic market. “Companies sell their products wherever they can sell them well, at a high price, and quickly. ”Sun Wei, the owner of an agricultural products manufacturing company in Pudong, Shanghai, said that some of the high-quality agricultural products they produce are sold in international markets to a greater extent, due to factors such as costs and prices. For example, the company’s colored bell peppers, sold in sets of 3 with a net weight of 400 grams, cost nearly 30 yuan in **; they sell well there. However, in the domestic market, they often face the problem of being too expensive to sell, or too cheap to result in losses. “More and more consumers are willing to buy high-quality products, but some of these demands for high quality have not yet reached a scale that enables economic benefits, and further exploration is needed. ” Some products are manufactured domestically but not sold there, as a result of companies’ decision to adjust supply based on demand. Yang Bo, the head of a domestic manufacturer of smart toilet seats in Tangshan, Hebei, said that before Chinese tourists flocked to Japan to buy smart toilet seats, few people in China used or even knew about such seats. It was difficult to sell smart toilet seats in shopping malls, and foreign-brand toilet seats were not widely available in the country. “After reports of the rush to buy products in Japan, demand among Chinese people for smart toilet seats shifted rapidly from latent to explicit, which led to an increasing variety of such products available in China. ——The reason why some “high-end products do not enter China” is that the overall supply level of related industries in the country is still not high. “When formulating a sales strategy, the existing supply level in the target market is also important. ”Sun Ming, the head of a speaker manufacturing company in Dongguan, said that in a given market, if a company can defeat its competitors at a cost of only 50 yuan, it certainly won’t spend 60 yuan, or even 51 yuan. The domestic speaker industry got a late start, and there are few well-known brands. Even so, mid- to low-end speakers from certain international brands can still maintain a competitive sales position in China, offering ample profit margins; therefore, these brands are not very eager to introduce high-end product lines. “The quality of products sold domestically is lower, and companies are also considering cost factors. ”Guo Wen, from a toy manufacturer in Yangzhou, said that there are significant differences in the decision-making factors when a company produces products for export versus those for domestic sales. Taking a plush fabric stationery box as an example, the factory price is 4–5 yuan, which includes the production costs plus a reasonable profit. When manufacturing toys for foreign brands, those brands generally require that the finished toys meet high standards, and production is carried out in accordance with those standards ； When manufacturing for domestic distributors, they usually care more about price, and production is determined based on it. When price is of primary importance, quality may be sacrificed, with compromises in materials and cutting. ——The \"double standards\" of certain international brands are caused by an inadequate domestic regulatory system. Walmart, the world’s largest retail company, has been exposed to various safety issues in China, with incidents such as the sale of fake \"green pork,\" expired food, and false advertising occurring on multiple occasions ； International brands such as Versace, Louis Vuitton, Armani, Chanel, Bobbi Brown, and Dior have all been found to have substandard quality in China. International brands that abide by rules abroad become \"bad kids\" in the Chinese market, mainly because the cost of breaking the law is low. In the eyes of some foreign brands, even if quality issues arise in China, by acting like ostriches for a while and facing fines that amount to just a few hundred thousand or even tens of thousands of yuan, they can get by without any real consequences; they don’t feel any pain at all. The case of Walmart stores selling fake \"green pork\" can be considered a significant penalty case in China, yet the final fine imposed was only 2.69 million yuan. A fine of such an amount has absolutely no deterrent effect on a multinational corporation of Walmart’s size. Can the quality improvement pace be accelerated? As the Chinese market enters a phase of demand-driven development, consumers have a stronger desire to purchase branded products and pay more attention to the cost-performance ratio based on high quality. This demand structure means that the old approach of competing solely on price can no longer sustain itself; quality has become key to competition among enterprises. It’s not that we lack the ability to produce high-quality products; rather, we lack mechanisms to encourage such products. Looking at international experience, many markets have gone through a process of moving from being \"quality lowlands\" to \"quality highlands\". When it comes to German manufacturing, people think of high-quality brands such as Mercedes and BMW. However, German manufacturing, with such a prestigious reputation, was also rated as \"cheap and shoddy\" at the 1876 World’s Fair in Philadelphia; at that time, the German market was also filled with goods of poor quality. After years of quality improvement, driven by a number of renowned brands, today’s German market has become a true bastion of quality. “The proportion of high-quality products in China will continue to increase. ”Chang Boyi, Global CEO of Roland Berger Management Consulting, believes that as the Chinese market enters a demand-driven phase, consumers have a greater desire for branded products and pay more attention to cost-performance based on high quality. This pattern of demand means that the old approach of competing solely on price can no longer sustain itself; quality has become key to corporate competition. “Whatever the demand, there will be corresponding supply. ”Jing Linbo, a researcher at the Chinese Academy of Social Sciences, said that the market can adjust itself, but this does not mean we can relax. Instead, we need to use appropriate methods to enable the market to fulfill its role of matching supply and demand more effectively and quickly, encourage companies to focus on producing high-quality products, and prevent market failures. \"We must not let a few bad actors scare away the well-behaved ones.\" ——Improve industry standards and raise the passing threshold for products. “Good products bring good returns, which in turn gives companies more motivation to improve. ”Xu Jing told the reporters that it’s not that we lack the ability to produce high-quality products; rather, we lack a mechanism to encourage such products. The United States, Germany, Italy, and Japan have comprehensive relevant standards and higher requirements in industries such as food, cosmetics, toys, and clothing. As the world’s second-largest consumer market, China’s industry standards are relatively backward; low-standard products crowd out good-quality products, leaving even less space for them. Only by raising our standards can the quality of our products truly meet international standards. Some of our country’s standards have remained stagnant for a long time, unchanged for two or three decades, and are severely outdated. Taking food as an example, the food standards in developed countries are often continuously updated, with good coordination mechanisms among regulatory authorities, third-party research institutions, and enterprises. Countries like the UK and Germany have corresponding independent research institutions that often identify certain food safety risks earlier than government **departments and produce independent research reports. Food standards are not set in stone; they must also keep evolving with the times. ——Protect intellectual property to give innovation more confidence. Only by insisting on innovation, domestic brands can elevate the overall quality of domestic products, thereby enabling some powerful foreign brands to drop their arrogance. Taking color TVs as an example, in the early days all such TVs in China were imported; despite their high prices and limited availability, domestic companies were unable to produce them, so consumers had no choice but to accept them. As domestic companies improve their production and R&D capabilities, the quality of domestically produced color TVs is getting better and better. Under pressure, foreign companies have also begun to bring higher-quality products to the Chinese market. Strengthening intellectual property protection, especially by stepping up efforts to address infringement of rights in goods sold via online channels and preventing the internet from becoming a lawless haven for such infringements, is the best way to foster innovation. Li Jing, the manager of a toy distributor in Shenzhen, said that a few years ago the company planned to innovate by building on a popular domestic animated series, turning its cartoon characters into a brand. But before Li Jing could reach an agreement with the copyright holders, counterfeit toys had already flooded the market through various channels such as the internet. After seeking advice, Li Jing learned that even if she applied to register another brand, pursuing legal action would be extremely difficult and could result in losses, so she had no choice but to give up. “If copyright is better protected, companies will not face such troubles and can focus on building their brands and improving quality. ”Li Jing said. ——Rectify market order and uphold the bottom line of competition. It is difficult to build trust between suppliers and demanders in a market characterized by competitive disorder, and so-called innovative products and services can only be nothing but castles in the air. Cai Jin, vice president of the China Federation of Logistics and Purchasing, said that the key to holding the line is to increase the cost of breaking the law. Compared to other countries, penalty standards in many consumer-related areas in our country are too low, and supervision is not adequate. In industries such as tourism and food, it is very common for companies to be fined once for breaking the law and then continue operating under a different guise. Experts recommend assigning punishment responsibilities to individual persons, and using mechanisms such as a nationwide credit database to \"make those who break their commitments unable to move forward.\" China’s regulatory and rights protection system should shift from focusing on the production side to focusing on the consumption side. In the domestic market, when consumers purchase substandard products, the main way to assert their rights is by returning the goods; for merchants engaged in fraudulent practices, the maximum penalty is compensation equal to three times the amount of the purchase price. In the United States, when products have quality issues, illegal companies face severe penalties in the form of enormous compensation amounts ； In some parts of Europe, relevant consumer protection organizations have the authority to establish arbitration panels in order to effectively protect consumers through industry self-regulation; companies that fail to fulfill their obligations may face severe penalties such as being barred from entering the market. Song Yu, a senior economist at Goldman Sachs China, said that he hopes for an improved market environment that will encourage companies to enhance their supply and meet new demands, thereby helping the domestic consumer market emerge from its current challenging situation and turn into a quality hub that satisfies and reassures consumers. - End -