You can stop reading this article if you have never bought a Made in China product in your life. But chances are, you have - just like the rest of us.
The ubiquity of Chinese products, coupled with manufacturing scandals of poisoned milk and toxic toys, is the reason why Poorly Made in China by Paul Midler should resonate with us all. Named one of the 'Best Books of 2009' by The Economist, the 240-page hard cover is chockfull of amusing, eye-opening anecdotes from the Chinese export manufacturing scene.
Mum's the word
At a recent talk held at Singapore Management University, organised by the Foreign Correspondents Association in Singapore, the 42-year-old author points out that the issue of poorly made Chinese goods continues to be a taboo topic among business people. Many have told me 'What you wrote in that book accurately reflects my experiences in manufacturing in China.' One on one, they'll tell me their stories but openly very few want to deal with the subject, he revealed.
Midler believes that before solutions can be formulated, there needs to be discussions. But before discussions can take place, people need to admit to the problems. Western importers would be the last to admit to problems as they have to convince their retailers that they are doing a better job than others. To some extent, we deserve these problems because nobody wants to discuss it, he said.
Turning tricks for profit
Midler, who studied Chinese history and language in school, had returned to work in China after completing his MBA at Wharton. The Chinese-speaking American entered the export manufacturing sector to discover that it was a game played on a field without referees, with no government agency for importers to lodge complaints and limited opportunities for legal recourse. So the book brings the reader down to the factory floor to witness the tactics that Midler experiences as a go-between for Chinese factories and American importers. And examples are aplenty.
An American importer of cheap dollar-store toiletries once called Midler to say that the bottles from China were becoming so thin that they were collapsing at the slightest squeeze: It's a goddamn plastic bag! the client said to him. The company's New York office finds that the Chinese factory had surreptitiously made downward adjustments over the months. When no one picked up on the first few adjustments, the factory decided to go for it again, he added.
The gradual degradation of quality over time is something that the middleman has to come to terms with. It is a cat-and-mouse game as he tries to pre-empt (but rarely succeeds) what the factories might do next to increase their profit margins. You can imagine the factories saying, 'I am going to price it to the point where I can at least break even today, and over time, find margins. I'll slowly find the savings, find ways to improve the production process, and maybe talk to new suppliers'. Some of these suppliers are the ones telling the factories, 'Oh I have a new trick for you. If you use this instead of this you can save some money,' the author explained.
He also described how he had to literally sniff out the clues to how a factory owner had been short changing him. Midler discovered, with the help of a fragrance supplier in Hong Kong, that the liquid soaps manufactured were all almond flavoured, except for some fruit-scented ones. At first, the Chinese factory owner denied so. Later, she argued that the almond scent is nicer. 'Didn't you think so?' she asked. The incident, seemingly innocuous and funny, worried Midler.
All the time with this one factory they would do things to the products and not tell us anything about it. It was very disturbing. If you worry about quality control and you don't have a sense of openness, there's a suggestion of risk there, said Midler to the audience.
In another instance, Midler met an expatriate who claimed his company had no production problems because they employ 90 quality inspectors. However, Midler thought this was bizarre as factories already had their own quality control staff. The huge number of people that were being hired to do the job that manufacturers were supposed to do, but were either unable or unwilling to do well, clearly indicates that there are deeper issues.
Hair gel, peeling skin, shortcuts
Midler's revelations of how products are made might also make readers think twice about what they buy. He recounted his first visit to a factory. He was shown a sterile environment where workers don masks, caps, and gowns. But once he became a regular visitor, he saw people spitting on the floor, and once, he even spotted a worker whose hands were peeling. Small, raw patches of flesh were exposed, and you didn't have to be a dermatologist to see that his skin was infected, wrote Midler. He later found out that the man's skin condition was caused by the hair gel that he was filling into gel bottles.
Midler stopped using 'made in China' toiletries immediately. However, he wondered what drove manufacturers to such practices. Could it be due to poverty or the country's developing economy status? His investigation into a number of factories led him to conclude: It would be nice to blame poverty but some of the factories engaged in quality games are not the poor ones, they're actually the ones doing better. It's the poor factories in China that don't dare play games with quality.
The ones doing better are the ones that have saved money, are a little bored with success, got over the excitement of getting big customers, of growing their businesses, now they are just trying to show how clever they can be, by taking some short cuts here and there. More fascinating, however, was that when manufacturers were caught cutting corners, their usual retort would go something like: For the price you were paying, what did you expect? This is an argument that can apply to many unethical business practices, Midler said. You could have someone who embezzles money and gets caught, and he could say 'For the money you are paying me, what do you expect?' But that's not how things are supposed to work. There's an agreement and nobody's putting a gun to these people's head... If you can't make a product, then don't agree to make it, he added flatly.
Don't make me lose face, take the blame
Midler believes that culture plays a major role in the present dynamic between factory owners and their stakeholders. To argue this point of view, he peppers the book with vignettes of his personal encounters in China. For example, during his stay at a five-star hotel, the toilet in his room broke down. He called the front desk and asked for the toilet to be fixed. Instead of attending to the problem, the front desk manager tried to get him to accept the situation. And when the American refused to do so, the blame was shifted to him:
We have many rooms in this hotel, as you know.
And only yours is broken.
The manager waited for me to absorb her suggestion, and I suppressed the urge to roll my eyes. I did not break your toilet, I said.
Oh? Are you sure?
This toilet incident is mirrored by a similar one in the factory. When Midler discovered that bottles of body wash were not being filled up to their stated quantity, he spoke to the factory owner about topping them up. She told him, It's not convenient. Then she tried to get Midler to accept the shipment, asking him to do it for the sake of our cooperation.
This is the problem, with some factory owners, knowing that the customers more inclined to help save their face, more inclined to preserve relationship for cultural reasons, they are more inclined to engage in certain production shenanigans. They know there is an escape valve, so they engage in more of this kind of behaviour, he said, adding that the decade-long Cultural Revolution might have ingrained such survival skills in people.
Face is an important concept across Asia, but in no other territory around the region is it combined so much with aggression, he observed. What perpetuates such issues is that there is also no culture of whistle blowing in China. While whistle blowing might viewed as a good thing in the West for counterbalancing unethical behaviour, it is seen negatively in China. Here, whistleblowers are not heroes, but social disruptors, he wrote. And more often than not, whistleblowers are regarded as betraying the collective for personal gain.
Hope for change
Midler concludes his book on a rather grim note. He pointed out that only a concerted effort at the grassroots level in China, and not state-level intervention, will bring about genuine change and improvement in quality. It has to happen at the factory level where people want to make quality products for its own sake, he said.
While he readily admits to not having any answers to the problems highlighted, he stressed that the issues need to be confronted and discussed. To him, that is the purpose that the book is serving now - having garnered the attention of at least three business journals that have ranked it on their top ten lists of books to read.
By making delightful use of humour to discuss the very serious issue of short-changing manufacturing standards, Poorly Made in China is an easy, entertaining and informative read - especially for anyone who has ever bought a Chinese made product.
The book was not manufactured in China.