Everybody is responsible for product safety

Intertek Group, the first foreign testing service company to set up a joint venture in China in 1989, has grown its business here to more than 5,000 people, a quarter of its global workforce, and has built more than 30 labs and 70 service outlets. Dr Wolfhart Hauser, CEO of the London-based firm and a 27-year veteran in the testing and certification industry, speaks with China Daily reporter Liu Baijia about the quality and safety of made-in-China products and opportunities in the testing service market.

Q: What's your view on the safety and quality of Chinese products?

A: Since my first visit to China in 1988, I have seen a great development in the quality of Chinese products. I am really impressed at what kinds of products are being exported out of China.

When there is a discussion on product recalls, it is said in the press, for example, 80 percent or even 90 percent of certain product recalls are related to Chinese products. China manufactures a higher percentage of various types of goods and consequently makes up a larger share of products globally sourced from it. But this does not mean Chinese products are worse than products produced in other countries.

Intertek is a really international company. That differentiates us from a lot of other competitors, because we do not work for safety and quality levels in one country; we are helping our customers, manufacturers, exporters, and importers to get the quality right for all countries where they want to sell their products. It is a challenge for every manufacturer, no matter in which country it is, to comply with all the regulations.

As you know, trade nowadays is very complex, because we have very complicated supply chains. Twenty years ago, we had a manufacturer, who manufactured all products in the same country and sold them there too, so it was relatively easy to do all the quality control. Nowadays, supply chain is much more complicated: there are a lot of parts and a lot of supplies from a lot of different countries. And the question is who is responsible for quality and safety? I think at the end of the day, everybody is responsible, but in most areas, we do not have compulsory testing and it is up to all these parties to make sure the products are safe and of the right quality.

Q: What areas in China will you make further investment in?

A: Our business is closely related to global trade. If you look at the growth of global trade, then we have a growth rate of 6 percent a year. It is interesting to note that now almost 50 percent of the growth is trade between emerging countries.

For Intertek, supporting the Asian markets here is important to us and the quality and safety demand is getting more and more important for our business in the future.

Having said that, we will still have a great opportunity in the Chinese economy in coming years, exporting into Europe and the US. I think the quality and complexity of products, which are made in China, will increase. And Chinese companies will continue to work to the requirements of the development departments of companies in the US and Europe that they are supplying; moreover, they will develop their own products.

That means they need more support and they need to have the know-how on how to develop these products. This is a great opportunity for Intertek, where we can bring our experience in all world markets, to the benefit of Chinese enterprises to support them in their global and local trade.

Q: With the increasing demand for designs in Chinese companies, does that mean a shift of the portfolio of your customers from multinationals to more local firms?

A: That's exactly how I see the development. Five or 10 years ago, we worked with a lot of big retailers or manufacturers, which bought products here. In the meanwhile, you see more and more Chinese companies doing development and trying to sell products on their own. Actually, almost all big names of local electronics brands are our customers, be it Haier or TCL. In fact, we have a laboratory in Haier's campus due to its large demand for our services, of course, on the condition of our independence.

In China, we also had some discussions with local customers on outsourcing their testing services to us - to help build or even manage their laboratories - like what we are doing in the US or Europe.

Q: What services will you introduce here to grow your market?

A: The Chinese industry will develop more of their products, so we will have more consultancy services here.

The new US Customs-Trade Partnership against Terrorism (C-TPAT) legislation requires security auditing for goods destined for the US market - that's one big area for us which we will be supporting our Chinese customers with. We will continue to expand CSR (corporate social responsibility) auditing services to meet demand.

I think what will become more and more important is energy efficiency and performance testing. In July, we established the first independent air-conditioner energy efficiency laboratory in Guangzhou.

Other areas like food testing will also become increasingly important and we are increasing investment and support to the pharmaceutical industry on quality standards, validation and research and development.

What we have seen in the Chinese industry is they are expanding from coastal areas into inland, so we also invested in labs in these areas.

(China Daily 12/04/2007 page15)