By Jiang Yong (China Daily)
Updated: 2007-09-25 07:23

Chinese-made goods, ranging from toys, toothpaste and tires to food for pets and people, have recently come under fire from Western media. Inexpensive and good Chinese products seem to have become a synonym for "dangerous" and "unreliable". In other words, Chinese-made goods are facing a credibility crisis.

To this author, the credibility crisis of Made-in-China products is a reflection of the current phase of the development of the country's market economy.

Supervision and monitoring always lag behind economic reality, and certain manufacturers will always be inclined toward forgeries in their search for profits. The history of forgeries is as old as the history of trade. Developed countries have also confronted them, though the degree has varied from one country to another.

In the late 19th and early 20th centuries, for example, American consumers could rarely be sure whether locally made products such as candies, meats and medicine were safe. It took rage and strong resentment on the part of consumers to force the government and companies to strengthen quality management.

Japan and the Republic of Korea (ROK), our two neighbors, also experienced "Japan-made" and "ROK-made" crises when their economies were taking off.

In addition, questions of product quality and safety are not confined to China in today's world. Many countries across the world are also haunted by such problems. According to data released by the US Food and Drug Administration, the amount of Chinese food that is denied entry into the United States is much smaller than the amount of Danish or Dominican food that is turned away.

So why is China singled out for such lashings? The "China threat" complex and widespread desire to "fix China" offer an explanation, in this author's opinion. Giving vent to emotions is easier than providing rational opinions. Some US politicians fiercely attack China as they campaign for re-election.

Some politicians are making a mountain out of the molehill of problematic Chinese products. Last year, for example, China's exports of toothpaste containing diglycol were worth $3.3 million. This was a very small portion of the $80 million worth of toothpaste shipped. And toothpaste represented an insignificant portion of the total exports of Made-in-China goods, which were worth $970 billion.

Despite all this, much fuss was made about the diglycol-containing toothpaste. Neither the outbreak of mad-cow disease in Europe nor the shoddy goods from Mexico a few years ago received such publicity.

More than half of all Chinese-made goods are products that have been processed for overseas companies, according to their requirements and standards. Exports by foreign-invested companies account for 58 percent of the country's total. In view of this, Chinese-made products are actually world-made ones. This is the natural outcome of the international division of work.

But, while getting actively involved in the process of economic globalization, China has run into protectionist obstacles.

Apart from the mounting protectionism and prejudice against China, we have to admit that the credibility crisis encountered by Made-in-China products is also the result of some Chinese enterprises caring about nothing as much as profiteering, and by some local governments that try to shield the wrong-doing enterprises, perhaps because they generate a large share of local revenues.

Quality is the lifeline of any enterprise, but some well-established Chinese enterprises, which have already obtained IS09000 certificates, are also involved in turning out problematic products.

This shows that not a moment should go by in which product quality is not an overriding concern. All enterprises, large ones in particular, should constantly be watching over their products' quality.

In addition, businesses should set up crisis-handling mechanisms to help them tackle emergencies caused by problematic products.

The Chinese media should also play their role as "watchdog" more efficiently to put pressure on enterprises to keep them from overstepping their limits.

Also, it has become imperative to change the model of economic growth. In many other countries, consumer demand constitutes one of the primary engines powering economic growth. But in China, exports have for decades been a paramount driver. This is particularly so since China joined the World Trade Organization in late 2001.

The country's foreign trade has been growing by roughly 30 percent a year and its foreign exchange reserves have increased by nearly 40 percent over the last six years.

Overdependence on the world market will lead nowhere but to friction with our trade partners, a strained environment and shrinking resources. None of these things will help our efforts to build a harmonious society and world.

Chinese-made goods are competitive because they are cheap. Keeping down costs, therefore, constitutes the guarantee of low prices. In the absence of mature and effective oversight mechanisms, the impulse to keep down costs easily turns into the fountainhead of shoddy goods.

In view of this, we must waste no time in upgrading the country's industrial structure or in pushing the domestic manufacturing sector to switch from a labor-intensive footing to a technology-intensive one that turns out high value-added products.

The author is a researcher with China Institute of Contemporary International Relations

(China Daily 09/25/2007 page10)