Quality Issues Continue

Quality issues continue to make the headlines and the Chinese government continues to issue flaky responses. Here is the problem in a nutshell:

So far, Beijing's handling of the complaints over its exports has been mixed. While it has promised both stepped-up inspections and more stringent enforcement of regulations, it has also suggested that the problem is overblown by the foreign media.

The Chinese government said on its Web site Wednesday that the Cabinet had passed a draft food safety regulation that "strengthens the responsibility of local governments and increases the punishment for illegal activities." No details were given, or a timetable for adopting the regulations.

The government doesn't get it. They think the problem is created by the international community to keep China down and perpetuated by the media.

Pushing more off one the local governments will get them a great deal of nothing. Beijing has almost no control of local governments, and officials' promotions and pay are tied to growth and output. Quality isn't in the formula. Plus, the local governments aren't well equipped to tackle quality issues. They have had no formal training and most of their resources are committed to building infrastructure to attract more investment.

Multinational corporations who have invested in and closely monitor quality have brought an undeserved level of comfort to retailers back at home looking to increase profits.

But foreign retailers and distributors have begun cutting costs by buying directly from local manufacturers, using Internet-based sourcing and other means to bypass the multinationals. This came partly from market-opening measures agreed to under China's 2001 entry into the World Trade Organization. Prices fell, but quality has suffered.

Once the plaintiffs' attorneys in the US get their hands on a few of these retailers, some of this should change. I've always thought that plaintiffs' attorneys deserved a special place in purgatory. Then I moved here.