Mending “Made in China”

By November 9, 2007 No Comments

While recalls of defective Chinese exports produce headlines, officials on both sides of the Pacific are evaluating the responsibilities of all parties involved–themselves included–to prevent dangerous goods from reaching the market.


Product recalls, U.S. government import bans on select seafood products, and import-related deaths in Latin America have many U.S. officials and consumers wondering if China’s regulatory scheme can ensure a minimum level of quality and safety. The list of faulty products is a long one, including lead-painted toys, contaminated foods, melamine-tainted pet food, fake pharmaceutical drugs, faulty car tires, and tainted toothpaste, among others. China’s economy has posted stunning rates of growth, but its regulatory structures have developed more slowly. This deficiency threatens to undermine future growth.

In the U.S., the Consumer Product Safety Commission and the Food and Drug Administration have stepped up and enforced better quality control. Trade statistics show that import bans regulated by the FDA and standards set by the CPSC have affected China’s exports. According to a recent New York Times article, “China’s exports of eel to the U.S. fell 94% [from 2006] after the FDA blocked the imports of certain types of seafood…due to the presence of excess antibiotics.” In addition, Florida Senator Bill Nelson has introduced a bill that would require that toys be tested by an independent, third-party to ensure that safety standards are met.

The Chinese government has also taken action, though the impact is hard to gauge. China’s Product Quality Law is criticized by some as too generic, lacking specifications and other requirements for some products. The Chinese government recently announced that nearly 800 people have been arrested for violating quality or safety laws, but details about the arrests and the damage caused by the violations has been lacking. Enforcement action is being taken, but how consistent and extensive it is remains unclear. Tommy Hung is a quality control agent for Flying Master, Ltd. and has inspected products for businesses like Ricardo Beverly Hills and Wal-Mart. He told US-China Today, “the Chinese government never specified the rules to do inspections. The inspection regulation is only between the buyer and the vendor.”

Many of those criticizing quality and safety shortcomings blame market pressures. Stacy Sun, founder of the Asia Pacific-U.S. Chamber of Commerce, explains that the “U.S. has put so much pressure on China” that Chinese producers feel they lack options. Sun adds that “in order to avoid bankruptcy and successfully compete for American customers, Chinese contractors are forced to produce as inexpensively as possible and deliver to retainers as quickly as possible.” Consequently, quality and consistency drop and the problem is magnified by the long chain of contractors, sub-contractors, and sub-sub-contractors. Each is focused on making a profit and none feel responsible for monitoring the performance of others. “The U.S. simply cannot expect China to produce the cheapest good in the world and simultaneously produce world-class goods,” says Sun.

Many American importers of Chinese goods have long recognized quality and safety problems. David Glatt has over 30 years of experience importing food products and says that “it has been a challenge working with China. The factories back then just did not have the proper training.” Mack Harashima, an importer of chemical raw material from China, told US-China Today that it becomes problematic once American companies begin relying on Chinese factories, and that “it is really up to the individual companies to check [product quality] for themselves.”

Since the issue is generally well-known by American companies doing business with China, how could recent recalls by companies like Mattel been avoided? Mattel recently announced they may have recalled products that didn’t, in fact, exceed lead standards and that in at least one other case the problem lay in a faulty design not Chinese manufacturing. Roger Rambeau, a product developer who has worked for Mattel, Sega of America, and Play Hut, was taken aback by Mattel’s 19 million-toy recall: “I am surprised Mattel didn’t inspect their products properly. Normally they are careful and have strong quality control,” said Rambeau. Rambeau explains that American manufacturers, like Mattel, usually go to great lengths of their own when it comes to quality control, paying attention to the minutest of details. According to Rambeau, “everything entering and leaving a factory is inspected and compared to specifications made by the manufacturer or distributor, samples are randomly tested, warehouse cleanliness is inspected, records of how materials were issued to the factory are examined, storage procedures are tracked, and even name tags on workers are checked.” With these stringent rules and regulations in place, it is difficult for defects to pass through, thus Rambeau argues Mattel’s recalls may be just be due to bad luck. “Incoming lots from a specific factory may be ‘skip lotted’ based on the quality performance of prior lots inspected,” said Rambeau, thus, there is a slight possibility of problem goods passing through unchecked.

Hung claims that it is not bad luck that has plagued American manufacturers, but rather carelessness. Hung acknowledges that although U.S. importers focus on a “consumer-oriented” inspection, they hire third-party inspection agencies too late in the production process of making a good. Hung promotes a hands-on method from the very beginning to the very end, from the inspection of raw materials to the in-process factory inspections to the testing of the final product. Otherwise, Hung claims, “consulting companies will only do the final inspection of random testing of 4-8% of the products and importers won’t know if the vendors ship the defects. By the time the product reaches the store, it will be too late to detect any defects.”

Are U.S. companies taking enough responsibility? American firms may want to direct blame at Chinese producers, but ultimately it the American brands’ reputations that are at stake. “Parents rely on the Mattel brand, not the Chinese government and its agencies,” says Sun. An abundance of resources to check for quality are available in China for American manufacturers. Resources such as independent, third-party laboratories are in place and readily available for American businesses. Glatt says these “labs are very sophisticated. Their equipment can check for bacterial levels, percentage of foreign materials in the product, and they can go down to the most microbiological levels of analysis.” In addition, consultants are also available to help with business transactions between U.S. and Chinese companies. “We understand that not only is there a language barrier, but cultural differences as well, so consultancy firms can help with the communication processes,” says Sun. Sun’s firm, China Global Ventures, works to educate both American businesspeople and Chinese factory managers. She’s walked them through the process of producing a good to American standards. “The incentive for Chinese factories to participate is ultimately to increase their profit and establish a good reputation in the American marketplace while American businesses can develop a relationship with these factories they can both rely and trust on,” says Sun.

It seems there’s blame enough for all: for the failure of designers and producers to ensure the quality and safety of their manufacturers, for the failure of importers to effectively monitor their production partners, and for the failure of governments to enforce standards. Some even criticize consumers for putting their desire for low prices ahead of safety assurances. Of course, most products imported from China perform safely and precisely as expected. Trade is booming and customers are snapping up a wide range of goods. Despite the recent wave of product toy recalls and tainted food products, surveys show American consumers are continuing to buy from China. A recent New York Times article reports that since 2006, there has been a 27% increase in U.S. food and agriculture imports from China. At the same time toy and sports equipment imports are up 15.9%. While the recent spate of recalls may be seen by some as only a small bump in the busy trade road, others see a clear warning that action is badly needed to protect consumers. China undoubtedly has much room for improving its product quality standards and regulations. American producers often need to recall their own products, but the American inspection regime is generally more vigorous and as a result consumer protections are stronger than they are in China. U.S. and Chinese government and industry officials have been meeting to discuss ways to strengthen guarantees of product quality and safety. It is imperative that progress be made and be made rapidly. As the Latin American deaths stemming from hazardous Chinese-produced cough syrup demonstrate, lives, not merely reputations and profits, are at risk.

Aaron Wong is a US-China Today staff writer and is studying International Relations: Global Business at the University of Southern California.