Made in China – no thanks!

Posted on April 1, 2012 by

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Chairman Mao’s botched economic policies may have been responsible for some 70 million deaths, but he retains a symbolic hold over the Chinese economy. His portrait is emblazoned all over the currency, while his successor Deng Xiaopmg (who turned Mao’s policies and eventually the economy around) doesn’t even merit an image on a coin.

The disparity between Mao’s performance and his reputation is instructive, for behind it are four key skills which all bad managers could profitably employ.

Firstly, the ability to justify his actions, however entirely self-serving, as being done for others – the same skill which allows sub-standard chief executives to rationalise huge pay packages while their underlings get peanuts.

Secondly, the art of ruthless media manipulation.

Thirdly, the ability to sacrifice friends and colleagues with impunity.

Finally, the ability to disguise activity as achievement (the more you have going on, the longer it will take for the disastrous consequences to become clear).

In the long run, of course, the facts will find you out. But who cares? We all know what we are in the long run. For example, most people had never heard of Zhang Shuhong until he hanged himself. One of legions of equally faceless sub-contractors in Chinese manufacturing, he owned part of a factory that made dolls for Mattel, the US toy giant. On the day he killed himself, Mattel had recalled 436,000 toys – some of them from Shuhong’s factory – that had been coated in poisonous paint, and a further 18 million that contained tiny magnets that could be deadly if swallowed. It was the second such recall in a month, and it made the doomed Shuhong one of China’s most famous businessmen, and the embodiment of all the world’s misgivings about what comes out of its factories.

2007 was an embarrassing year for Chinese exports. Dogs have been keeling over after eating melamine-laced pet food. In Panama 100 people died from drinking cough syrup containing antifreeze, which was also found in toothpaste in Spain. In America there is talk of regulating all Chinese imports – American families should not have to play Chinese roulette, as Senator Dick Durbin put it – but that would be a mammoth task: 40% of US consumer goods come from China. From Who Sucks:

With recent high-profile incidents involving dangerous goods imported from China, the American media has finally begun to warn consumers about the dangers of cheaply producing goods in a country hardly known for its strict safety regulations. After spending some time digging through product recall press releases, we’ve found that the mainstream media is still only reporting the tip of the iceberg when it comes to dangerous products imported from China. Here’s a timeline we’ve created, which shows the huge amount of faulty/dangerous Chinese product scandals so far this year:

The list is truly shocking. My “favorites” include:

  • Razor Blades For Kids: Tri Star International recently recalled a made-in-China children’s stationary, which contained a dangerous razor blade.
  • Lead Paint On Baby Toys: Stuffed Fun Balls, which were sold at dollar stores and other discount stores from June 2006 until March 2007, were recalled because the paint used by the Chinese manufacturer of the baby toy contained dangerous levels of lead.
  • Toxic Fish: It is believed that imported Chinese monkfish was actually deadly puffer fish, a labeling disaster that lead to the hospitalization of at least one person in America.
  • Poisonous Toothpaste: The FDA recently found that several low-priced toothpastes imported from China contained diethylene glycol, which poisons the liver and kidneys and depresses the central nervous system.

Whilst it’s bad for us in the West consider Chinese consumers who are at the mercy of what the Chinese government decides to make of any situation. The Chinese government has announced that it would rewrite food safety regulations, introduce a national recall system and overhaul the nation’s top drug watchdog. It’s also sentenced a former top drug safety official to death.

Boing Boing reports that Bunnie has blogged his China thoughts in detail, with a series of great posts:

Skill: Factory work in China isn’t unskilled labor — anything but. Watching the expert sewing in one of Bunnie’s videos is like going to a close-up magic show, an astounding and effortless-seeming exhibition of manual dexterity. Contrast that with the skill of the people — some children — making rubberized tags, by hand, their arms branded with character logos burned in by accidental brushes with hot molds. And then there’s the guy who can get rid of a $2 component by substituting $0.16 worth of parts and $0.05 worth of labor, paying someone to join together tiny sub-components all day.

Dedication: When it’s production crunch time, Chinese factories run to a romantic idealism that’s part Bushido, part IBM Song Book. Bunnie describes the final stages of the manufacturing setup for Chumby, and the intense personal dedication the factory workers showed — and recounts an amazing story of a talented senior engineer who didn’t know what Chumby was for because she didn’t know what the Internet is.

Feeding the Factory: Like Google and other high-tech employers, Chinese factory-cities attract the best workers by offering food. Factory cafeterias aren’t the same as the Googleplex’s gourmet chef. Chinese factories run a little like factory farms, isolating new members of the cohort to prevent the spread of disease: guests eat off disposable plates and cutlery to stop them passing germs on to the factory’s live-in, eat-in workers, who are subjected to intense medical scrutiny to prevent factory disease outbreaks.

Scale: The size of the factories, iPod City’s own factory off-ramp, the enormous cohort of women workers in Shenzen — China’s manufacturing is at a scale that beggars the imagination.

It’s not just America: 80% of the world’s toys are now made in China, most of them in the Pearl River Delta – a vast, smog-choked landscape of factory compounds. The workers are mainly women from rural areas – part of the biggest movement of people in human history. They live in concrete dormitory blocks with chicken wire windows, share a room with up to 22 people and work 15-hour shifts, seven days a week. The profit margins for toys are tiny – of the $9.99 retail price of a Chinese-made Barbie doll, only 35 cents goes to the producer – and with children giving up toys ever younger, the market is increasingly squeezed. Inevitably, conditions are terrible and corners are cut. Lead paint, for instance, is poisonous but cheap (it can be recycled from old computers), and gives a glossy sheen. Western greed is as much to blame for all this as Chinese ruthlessness. We consumers need to wake up: you cannot have ultra-cheap products and a clear conscience.

So what can be concluded from this? If there was to be a threat to Chinas authoritarian form of export-led growth – capitalism with a dictatorial face – they assumed it would come from dissident pro-democracy or international human rights groups. Now they find the real danger lies in children’s toys. By linking China’s future to the high street shoppers, unlike protest groups, don’t have to mobilise to effect change: they just have to stop buying. And when their children’s health is at risk, that’s what they do. So it comes to pass that the agent for revolutionary change in China is that least regarded of species: the consumer.

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