Will Chinese Manufacturing Quality Improve?
April 7, 2013 12:24 PM   Subscribe

Will the phrase "Made in China" eventually overcome its stigma as "Made in Japan" once did?

50 years ago, cheaply-made goods Japanese goods flooded American markets. They were popular for some time until a widespread backlash developed as people noticed these goods were poorly made and easily broken. Slowly, the the stigma of "Made in Japan" was overcome, and today Japanese-made goods are actually prized.

This year I've begun to notice increasingly widespread backlash against crummy China-made goods. And I'm wondering if the Japanese analogy is likely to continue - i.e. is Chinese manufacturing likely to improve? Or is there just too much third world demand for dirt-cheap, barely-functional goods? That strikes me as the distinction here: Japanese were mostly targeting US and Europe.
posted by Quisp Lover to Grab Bag (30 answers total) 6 users marked this as a favorite
 
Yes, probably.

In some areas, the hurdle is already been jumped. It has always been a mistake to categorically call Chinese goods dirt cheap and barely functional. The reason dirt cheap and barely functional goods are that way is because they're made to fit that price point, not because the patch of dirt where the factory located. The fact is that Chinese manufacturing is in many areas at least equal in capability to places like the US.
posted by 2N2222 at 12:32 PM on April 7, 2013 [4 favorites]


There's really no way to know. That change for Japan was a deliberate effort, and it was very expensive. IIRC it was the president of Sony who was on a trip to America and noticed the reputation that Japanese products had, and was ashamed. He came back from that trip determined to do something about it, and spent a lot of time, money, and effort on his own company, and convincing other companies to do the same.

There's really no way to know if the Chinese will be willing to do the same thing, and no way to know if they even care.
posted by Chocolate Pickle at 12:33 PM on April 7, 2013 [7 favorites]


Japanese manufacturing went through a conscious and radical quality control overhaul in the mid-late 20th C. This wasn't just a matter of getting better at making things; it was an attitudinal shift. Methods developed then were taught in my (American) engineering classes.

OTOH, it's not like Chinese goods can't be high-quality — Apple products, the epitome of fit-and-finish in consumer goods, are all China-made and everyone knows that.

I think there's a market for cheap and sloppy manufacturing and there will always be someone who provides it. As long as your disposable tat says "made in China" on it, that phrase will be used to indicate disposable tat, even if it's only a small fraction of China's output. Until some other manufacturing base takes over that role (India?).
posted by hattifattener at 12:36 PM on April 7, 2013 [1 favorite]


China manufactures some of the highest quality consumer goods in the world; for example, Apple products.

As always, though, you get what you pay for. If your selection criterion is "the cheapest option from Walmart", then it's always going to be junk, whether it's made in China, Malaysia, Vietnam, India, or the next rising third-world country with cheap labor and reliable infrastructure.

China may overcome some of the stigma as reasonable-quality Chinese brands like Lenovo and Haier become better known overseas.
posted by qxntpqbbbqxl at 12:37 PM on April 7, 2013 [6 favorites]


China's population is ten times that of Japan, and they've got about 30x more land on which to build factories. More than likely, as the middle class develops (and demands higher-quality goods), manufacturing quality will continue to stratify.
posted by griphus at 12:37 PM on April 7, 2013


Hasn't it already? Quite a lot of high end stuff is made there now.

Everything apple sells, most nice stereo/home theater gear, almost all clothing, basically anything with electronics in it even if it says it wasn't, Almost anything that involves a bicycle, etc.

If you go in to a store, even an upper end department store most items in there will be made in china. Only the very high end stuff is made elsewhere, and often like American apparel I bet the fabric is still made in china.

Low end stuff is still made in china, but all the high end stuff is now too. The difference is that there's some BS cat and mouse game going on to sort of try and obscure that it was made in china more than half the time(ie do some minor assembly in Taiwan, or on more expensive stuff in Europe to obfuscate the fact it's all made in china).

Basically everything but cars are already made there. And I'd have a hard time believing most of small parts, especially electrical weren't already made there too and just badged as Bosch later or something. Yes, even in BMWs and such.

is there just too much third world demand for dirt-cheap, barely-functional goods?

There's a demand everywhere for cheap stuff. And as long as there's that demand, and they can meet that price point they will. They don't care about the image of being "cheap" because they're still making money. It also doesn't mean quality goods aren't being produced in the shop nextdoor, or even in the same building though.
posted by emptythought at 12:37 PM on April 7, 2013 [2 favorites]


Yes, 2N2222, for sure. I should have noted that. Iphones and iPads, for example, are damned well-manufactured. It's not that the Chinese are unable to manufacture good quality, it's about economic incentives. I get that.

But in many categories of goods, there are literally no remaining decent options, because cheap Chinese goods dominate. Will the incentive structure change to the point where we get better quality household and light consumer goods from China?
posted by Quisp Lover at 12:39 PM on April 7, 2013


Also, the demand for dirt-cheap barely-functional goods -- the proverbial $30 DVD player at Walmart -- is very much a first-world demand.
posted by griphus at 12:39 PM on April 7, 2013


Oh, dear. Hijacked.


"the demand for dirt-cheap barely-functional goods -- the proverbial $30 DVD player at Walmart -- is very much a first-world demand."

Sure. And that's why Japanese goods were popular at first. As I said, they were cheap. There was an eventual backlash, though.

I'm not exploring motives or capabilities. I'm just wondering if the situation (i.e. a marketplace dominated by utter crap) is likely to continue, or if the forces that led the Japanese to improve their quality will also apply here.
posted by Quisp Lover at 12:43 PM on April 7, 2013


Quisp -- there are few categories of goods where inexpensive, low-quality is your only alternative, but the price differential between the lower-quality Asian mass manufactured variety and the high quality variety can be extreme, and the corresponding lower demand really changes the retail channel.

Wal-Mart and Ikea can sell the similar low-end bookshelves for $100, but plenty of furniture companies from North Carolina will sell you a beautiful one of the same dimension, for $2500 ... but it's something that no retailer is likely to stock outside of design showrooms in Manhattan, Palm Beach and Beverly Hills.
posted by MattD at 12:47 PM on April 7, 2013


I disagree that Japanese-made goods improved because of backlash against cheap Japanese goods. Japanese goods improved primarily because the Japanese economy improved to the point where it was no longer cost-effective to have Japanese workers make cheap goods of indifferent quality.

The demand for low-price, lower-quality goods never went away. The location where these goods are manufactured changed.

So, will China continue to make this stuff? Yes, until standard of living/wages in China rise to the point where it is no longer profitable for Chinese workers to make it. Then, I don't know? Will the cheapest-of-the-cheap manufacturing move elsewhere (and if so where?)? Or will goods get more expensive? Or ROBOTS?!?!?
posted by mskyle at 1:31 PM on April 7, 2013 [1 favorite]


Yes. I worked with a Chinese manufacturer for a few years, and the strides they made are absolutely impressive. And they are just one company out of millions.

The Japan comparison works to a degree, however Japan's major consumers were always going to be the export markets. China has been serving the export market predominately for some time, however there is also a massive domestic market there.

(i.e. a marketplace dominated by utter crap)

I would caution you from this arrogance. The reason there is a marketplace dominated by utter crap is because people buy crap. As mentioned, China can produce whatever you need – an iPhone made by Apple or an candy in the shape of an iPhone. The reason they produce crap is because people buy crap. I would advise you keep repeating that until you really feel it, for to underestimate China is a fool's errand.

In the example of the company I gave before, when I met them, they had been let go from their supply contracts by a major European supplier, due to massive variabilities in product quality and safety problems. Our goal was to get that customer back. Over the next three years, the company invested a tremendous amount of money and time upgrading, up-skilling, training, recruiting.

At the end of the process, not only were they within range of getting that competitor back, they were able to match the performance of the leading American product (best in the industry) within a few percent... for one-third of the price.

Needless to say, the American competitor went bankrupt because their cost base was too high. Classic strategy problem. They American company offered too much quality given the need of the consumer.

So will Chinese quality improve? Yes.

Keep in mind, the new Bay Bridge in San Francisco used steel manufactured in China.
posted by nickrussell at 1:50 PM on April 7, 2013 [4 favorites]


I think China's reputation will improve quite a bit once they are no longer the cheapest place to manufacture stuff.
1) the cheapest manufacturers will leave
2) the poor reputation will shift to the new cheapest region
3) there will be more competition on quality in China since they won't be competitive solely on price

I imagine all this probably happens when Africa gets its shit together re. mass manufacturing infrastructure.
posted by ryanrs at 2:07 PM on April 7, 2013 [1 favorite]


I think there will always be a region of the world that builds the cheap stuff for the rest of the world to consume.

I also think that a lot of the backlash against China, or Japan, or Yugoslovia or wherever happens to be popular at the time, is that cheap goods disrupt established marketplaces. And the people with jobs in those disrupted industries resent having to change what the do. So instead of competing head to head, they just bash the competition and hope for the best. "Oh, those transistor radios from Japan are junk. We use tubes for warmer sound!"

Chinese manufacturing is fine. You generally get what you pay for. If you want a $2 vice, Harbor Freight has it for you.

China's biggest problem has been the cheating that has been happening. Melamine in the dog food, lead in the paint and whatnot. This is mostly due to lack of oversight from the people buying the stuff- they don't perform as much quality control because it is inconvenient and because maybe they don't want the answers to the question of why their vendor can make a toy for 1/10th what the previous one did. And the Chinese government and the consumers in general are aware of that and are reacting appropriately.
posted by gjc at 2:23 PM on April 7, 2013


To a large extent, people get what they pay for. If you offshore your production to China principally to cut costs you will get shoddy crap. If you get something at dealextreme for 1/5th to 1/10th of the normal price (aided by China's amazingly low postal rates) you will also get shoddy crap.
posted by epo at 2:49 PM on April 7, 2013


Also this story is much older than mid-20th-century Japan - it's been happening since the Industrial Revolution. Look at what people in Europe were saying about US manufacturing (and culture, for that matter) in the early 20th century and it's going to sound really familiar. Right down to the tainted medicines and the doctored-up milk.
posted by mskyle at 3:31 PM on April 7, 2013


The iPhone is primarily made in China. The Chinese already have a reputation for being able to scale and produce very high quality stuff. The phrase made in China may not have the trust of made in Japan at the consumer level, but in industry it has a great reputation.
posted by humanfont at 4:53 PM on April 7, 2013


Yeah. I'm pretty solidly in the already there camp. My friends whose companies make physical products don't even imagine an *option* other than China. It's where things get made.
posted by colin_l at 5:00 PM on April 7, 2013


...
The quality movement in Japan began in 1946 with the U.S. Occupation Force's mission to revive and restructure Japan's communications equipment industry. General Douglas MacArthur was committed to public education through radio. Homer Sarasohn was recruited to spearhead the effort by repairing and installing equipment, making materials and parts available, restarting factories, establishing the equipment test laboratory (ETL), and setting rigid quality standards for products (Tsurumi 1990). Sarasohn recommended individuals for company presidencies, like Koji Kobayashi of NEC, and he established education for Japan's top executives in the management of quality. Furthermore, upon Sarasohn's return to the United States, he recommended W. Edwards Deming to provide a seminar in Japan on statistical quality control (SQC).

Deming's 1950 lecture notes provided the basis for a 30-day seminar sponsored by the Union of Japanese Scientists and Engineers (JUSE) and provided the criteria for Japan's famed Deming Prize. The first Deming Prize was given to Koji Kobayashi in 1952. Within a decade, JUSE had trained nearly 20,000 engineers in SQC methods. Today Japan gives high rating to companies that win the Deming prize; they number about ten large companies per year. Deming's work has impacted industries such as those for radios and parts, transistors, cameras, binoculars, and sewing machines. In 1960, Deming was recognized for his contribution to Japan's reindustrialization when the Prime Minister awarded him the Second Order of the Sacred Treasure
...
http://www.wtec.org/loyola/ep/c6s1.htm

posted by sebastienbailard at 5:32 PM on April 7, 2013 [2 favorites]


I work in pharmaceuticals, biotech and medical devices. In recent memory, China has provided APIs (Active Pharmaceutical Ingredients) that are sub-par and actively hurting people See the "heparin" case for the most famous. In my field, China is not trustworthy as a supplier, but they are also hiring Westerners like crazy to bring them up to par. They are not there yet. I wouldn't take a drug made in China right now. However, they are taking action to comply with WHO/FDA/JP/EU regulations, so this period is transitional.
posted by kamikazegopher at 5:55 PM on April 7, 2013


Just to set the record straight, the iPhone is made by Foxconn, which is a Taiwanese company with factories in China. It is not a Mainland Chinese company.

Some industries and companies in China are capable of very high quality and some are not. Sometimes what drives poor quality is buyer demands for low pricing.
posted by Dansaman at 7:54 PM on April 7, 2013


Short answer: No.
Long answer: Possibly, but most likely not within our lifetimes.

I'll be the devil's advocate here and give you the reasons why I don't think "made in China" to make the same strides as "made in Japan" or even "made in Korea" did. There are several reasons as to why I don't think there will be any great strides in Chinese manufacturing anytime soon but it tends to boil down to the fact that there is no competition in the Chinese domestic market so Chinese corporations have a tough time on the international scene. They're familiar with the low-price and low-quality strategy but they're one trick ponies and that's their one trick.

Perhaps it's because I pay more attention to business news now, but there also seems to be more of a flagrant disregard to the extent of antagonism towards customers and consumers that I don't remember seeing as Japan and Korea were developing. The milk-powder scandal, that incident with the high-speed rail, and now the recent dumping of pigs in the Shanghai river all demonstrate this attitude.

I always used to roll my eyes when people brought this up but nowadays I find myself agreeing with this more and more: The political climate in China is going to have to change before we see any significant change in China's manufacturing quality. Opacity, corruption, and the suppression of information seem to either encourage this kind of behavior or lead people to believe that they can get away with this kind of thing. While some of the people involved in the milk scandal were punished (and quite harshly), I don't believe anyone has been identified as culpable for the train accident or the pigs in the river. While there was a big public uproar, afterwards there was a sort of collective hand-wringing and "well what can you do" response when no one was punished.

It's not really the fault of the factory workers themselves. Many people have rightly pointed to Foxconn / HonHai as an example of high quality Chinese products but keep in mind that Foxconn's management is not (mainland) Chinese. The company was created specifically as a reputable agent for international companies looking into taking advantage of low cost Chinese manufacturing while not taking a major hit on quality of finished product. However, right now factory owners and manufacturers still believe that cutting corners and making inferior quality goods is the best way to make money.

Until that changes, things will probably remain the same and I don't see the political climate in China changing drastically anytime soon.
posted by C^3 at 7:59 PM on April 7, 2013 [1 favorite]


I think that it's already excellent quality. You get the quality you pay for. At least some companies have relocated their production to China because they're able to get superior workmanship there. Yes, a lot of what comes out of China is cheap goods, but if you have a high-end luxury product to make, or (for instance) absolutely anything ceramic (kitchenware, vases, jewelry, molds), China is worth a very serious look as a production center.
posted by Miko at 8:09 PM on April 7, 2013 [1 favorite]


Someone mentioned Harbor Freight upthread - a while back one of the woodworking magazines (American Woodworker I think) did a review of floor standing drill presses less than $500 or some such and, on a recommendation of a friend of one of their editors, threw in the Harbor Freight model. And were pleasantly surprised to find that it was pretty much in the pack on almost every criterion they looked at, including runout (wobble in the chuck) which is where you'd expect the point of failure to be in one that was poorly made.

So yeah, there are factories in China that have definitely caught on that the the profits are low and the market for absolutely worthless crap is easy to saturate.
posted by Kid Charlemagne at 10:22 PM on April 7, 2013


I think your premise needs amending - I don't believe that Japan moved up the quality tiers because of backlash. They did so, because their capabilities grew and they were now able to compete higher on the value chain for more profit and more money - there's only that much cash in cheap junk. In the beginning all they could do was low-skill, low-knowledge and low-capital products - cheap stuff, toys, radios etc.., but then things changed. I bet you some of the older people here remember how Japan in the 60's and 70's was mass buying American patents and taking out licenses, which the American companies sold cheap, as they didn't think Japan would be a competitor ("cheap stuff"), and it was nice spare change they could pick up for "nothing". Well, that backfired in that the Japanese learned a lot from these patents, reverse engineered products and educated their workforce in technical fields. When they were ready to compete, they came on fiercely. The Americans were unprepared, and I remember distinctly reading many articles about how foolish the American companies were to sell patents and licences for pennies and create these unstoppable competitors. Then there was the backlash about how they were mere imitators not innovators. Then eventually that too died, as the Japanese started innovating in many fields.

The Chinese are different in one way. Americans now long for the good old days when you could sell patents and licenses to the Japanese - even if they made the error of selling those for cheap. At least it was some money. Now the Chinese rip off products or force transfer of technology, and the losing companies get nothing, except at best some brief access to the Chinese market before they go bankrupt. I can speak only from personal experience in areas I have knowledge of - film-production equipment and the electronics associated with such. What happens is that if an American company tries to make stuff in the U.S., they are too expensive (and subject to cheap imports from China) and tend to lose in the marketplace. So they go to China to manufacture - which works for a short period of time... because more often than not, the Chinese subcontractor will run two shifts - during the daytime, it's products for the American company, in the nighttime it's exactly the same product (which they now know exactly how to make) made and sold under their own brands for a fraction of the cost. And then the American company loses - because they can no longer compete either on price OR on quality - it's exactly the same stuff. So what to do? Well, you could try to sue - but that's hopeless, because (1) good luck suing in China (2) it takes too long and too much money to sue in the states, and (3) even when you eventually get an injunction, the Chinese company changes names and it's back to business and (4) you simply can't police everything that's sold on the internet whether legally or not. The only thing you can do as an American company is to try to amortize your product and make a profit in the window of time before the Chinese strike with their copies and also through relentless branding - because that's a significant weakness for the Chinese who often cannot brand their products as it's so fly by night, sell quick and move on, companies come and go within months, names of products change etc. (of course, there are exceptions: lenovo etc.).

So the answer to your question is ABSOLUTELY, DEFINITELY the Chinese will move up the value chain. They will do so because they want to make money. If it involves quality, so be it. It will be a BIT more expensive but ALWAYS cheaper than the American/Western product of equal or even lesser quality, simply because of inbuilt competitive advantages. I've seen that happen with things like field monitors, stabilizers, specialty lights etc. - the quality now rivals and sometimes exceeds Western products (which are often made in China anyway).

Another example: a friend of mine ordered a specialty product (special projection equipment) - the Chinese engineers made it for 20% of the price of the rival Germans, and while initially there were many problems, the Chinese persisted until all problems were worked out - now they dominate this niche. I was witness to this proces over 24 months.

Make no mistake - the quality race is already on the way. It's already happening.

What may throw some folks a bit is that one big difference from Japan is that China will likely remain stratified for a long, long, long time - i.e. they will do BOTH cheap junk AND extremely high quality goods, whereas the Japanese (partially through a homogenous and smaller population) have a cultural bent that prizes quality (sometimes resulting in a lack of flexibility). The Chinese have a huge internal market that needs servicing and both cheap junk and expensive quality stuff will be in demand. So while the junk will be around for a long time, the quality stuff is already coming and will continue to come on stronger.
posted by VikingSword at 10:45 PM on April 7, 2013 [1 favorite]


I work for a company that gets a lot of its foundry work and final manufacturing done in China. when we initially went to these foundries, many of the castings were flat-out inferior to just about anything else. This was a known problem to the extent that several customers would write "No China-sourced castings" provisions into their contracts with us. Eventually we set up a quality-control program for the foundry to hold them to standards that are followed in places with better reputations. If we hadn't done that, our product wouldn't have been able to compete on price. We are a pretty large company, so we have an actual business presence over there, and we get and enforce Chinese patents as much as possible to protect us from copycats.

So I think some of the pressure to change to higher quality products is going to come from outside.
posted by ArgentCorvid at 5:25 AM on April 8, 2013


China is one of those examples where you get exactly what you pay for.

I've gotten some limited prototypes of blown glass and a couple of metal cast items done through small production houses in China, and they're nice. I've gotten the full spread of quality, that seems to more or less correlate with the price. The nicer ones that were expensive were just about the same price as getting them done domestically, after shipping and time costs were factored in. BUT, the quality really was just as good.

Another example is the coffee roaster manufacturer Probat. If you purchased one of their machines made in the late 80's and 90's, you'll get a piece of shit. They just moved their production to China, and the quality took a huge dip. But now, they're really high quality machines, even better than they've ever been now that they've started...well...paying for it.
posted by furnace.heart at 8:54 AM on April 8, 2013


Well, that's reassuring.

At this point, I feel cornered in a number of consumer good realms where I can no longer buy, for any amount of money, a usable product. Stainless steel steamer baskets being the most recent ordeal (if you own an older one, treasure it).

Hopefully the quality range will broaden over time.


ArgentCorvid - you sound like you're at stage 2 of the three stage pattern described in several postings. Your company has taught your Chinese manufacturer to do a good job; hopefully that good deed won't be punished by his turning around and competing with you.
posted by Quisp Lover at 9:56 AM on April 8, 2013


luckily we are a large enough company to have actual staff (engineering, legal, etc) in country, and we have the resources to litigate unauthorized copies of our products. Smaller companies (or ones that just contract with the supplier) don't have that luxury however.
posted by ArgentCorvid at 12:39 PM on April 8, 2013


Interesting. If you guys do manage to successfully police this, there'd be a helluva interesting (and marketable) feature magazine story or book in it, if anyone at your company's got the time and writing chops for it. This is sharply enough counter to conventional wisdom that people would be interested in hearing about it.
posted by Quisp Lover at 7:41 AM on April 10, 2013


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