Inkwell: Authors and Artists

    
You can't be against free trade, Mark. That would make you a
protectionist! This word, by the way -- "protectionist" -- is used by
economists in the same tone as preachers who talk about "sinners." It's
a buzzword, and so it goes out the window. We don't use the word.

I believe in discussing the results of major policy changes. And, in
general, I subscribe to the law of unintended consequences. When you
make major changes to a complex system, you very likely will be facing
unanticipated circumstances. 

China remains an unreliable power. It's one thing when you are dealing
with something unstable. It's quite another when that unknown is very
large. We are the makers of problems that are to come vis-a-vis China
(just as we are ultimately to blame for product recalls). In the end,
the risk outweighs the benefits. 

On this point, I am reminded of a recent opinion piece by NYT's
Nicholas Kristof in which he suggests that we humans are not very good
at identifying the really big threats. Our brains aren't wired that
way. Kristof has a China background, and so I'm not sure why he doesn't
tie the risk notion to China, but maybe he will have a chance to do so
in the not-so-distant future. "Who could have known?" commenters will
suggest. Here's the article link:

http://www.nytimes.com/2009/07/02/opinion/02kristof.html?_r=2
  

    
It's hard to buy into the idea of "sociopathy on a grand scale" without
a solid statistical footing. That's an extraordinary claim, and
extraordinary claims require extraordinary proof. Otherwise it really
reduces to a set of interesting, but not really probative, anecdotal
accounts of behavior. Especially the lurid cases like melamine in milk
products.  

But given the situation as it is, what is the proper response? It
seems to me that there are three choices: 

A. Do nothing, and hope for the best.
B. Erect trade barriers as punishment.
C. Engage with China at both a governmental and private level to
improve the situation.  

Needless to say my money's on (C), and I think the best strategy is to
help improve the rule of law in China so that quality issues can be 
addressed effectively though the legal system.  
  

    
Paul, would it be too much of a stretch to draw a parallel between this
trend in commerce in China and the Great Leap Forward, wherein cooperatives
reported inflated production figures in an attempt to appear more zealous
than the next, were then assessed a share to go to the government based on
those false figures, frequently leaving almost nothing for the people who
worked the fields and leading to massive starvation?  Is there something
deeply embeded in the Chinese culture that both kept local authorities
reporting increasingly absurd production figures then and keeps factory
managers making absurdly low bids now?
  

    
Hi Michael - Thank you for the follow up. I don't want to belabor the
point, but I did throw out a piece of evidence along with the
suggestion of an endemic "sociopathy." This is not the kind of forum
where one goes into a great amount detail, and I thought that the one
news item was just enough to cause a few readers to rub their chins. 

As far as your suggestion that I gather up more news, you could
probably point to the infants that were killed in the melamine scandal.
I believe the final tally was six dead and over 300,000 injured.
That's a lot of proof. 

I understand that I have suggested something that is disturbing, but
let's not make the mistake of insisting that there is no problem
because a solution to that sort of problem might not exist!

From the comments that are posted, I can tell who has read the book
and who has not. If you do choose to pick it up, you will note that the
very first line is a quote by James Thurber: "It is better to know
some of the questions than all of the answers." This is something that
rang in my head during the earlier stages of note taking. I'm not the
guy who has the answers, and I don't think anyone expects that you will
have the answers either. But let's first consider the issues. Let's be
frank and ask ourselves whether there is a problem.

I've read your A, B and C options, and what seems missing is an option
for China. Why is it that we have to do anything at all? Why can't the
Chinese address the situation on their own? To be frank, "Poorly Made
in China" could have been written by someone who was Mainland Chinese,
but it would have never happened. Why?
  

    
John - You could draw a few parallels, and here I am thinking about
those factory owners who are motivated to help the government meet
national goals. In previous decades, the goal was increasing employment
as the Communist Party sought to dismantle the Iron Rice Bowl system
of social security. In more recent years, the mandate was to increase
foreign reserves. I have spoken with factory owners who were
unmotivated by offers to pay for goods with renminbi, no matter the
premium we were willing to pay. These conversations were instructive
and perhaps even disturbing. This ties in with the carrot and stick
point mentioned above. Factory owners had a political incentive to
manufacture goods at no profit. And on the other hand they were not
reprimanded for producing faulty goods. 

It is tacitly understood that Chinese manufacturers must do whatever
is necessary. This is why there is no government agency in China that
handles complaints filed by foreign importers.

Regarding the suggestion that I offer more solutions, here is an easy
one -- for China. Open an office that separately investigates claims
filed by importers who believe they have been treated unfairly by their
suppliers. What a public relations coup that would be for a country
that has suffered so much damage to its reputation. It would serve as a
workaround to a court system that moves too slowly and is
unpredictable at best. Services like this are available on an informal
basis at some China trade shows, and they do help reduce the incidence
of intellectual property violation. Taking this to a larger scale would
be in China's best interest, or maybe it isn't.

  
  

    

> "Poorly Made
> in China" could have been written by someone who was Mainland Chinese,
> but it would have never happened. Why?
...
> in China's best interest, or maybe it isn't.

Those are a couple of classic rhetorical questions.
  

    

Paul, this is the crux of the matter, IMO:

> Second, statistics don't say enough about the nature of failures. They
>  don't take into account the degree of callousness involved, or they
>  may not hint at a widespread apathy to correcting the problem. If
>  American consumers knew some of those who initiate quality problems as
>  a part of their business plan and saw the extent to which these people
>  really don't give a damn, they would be more concerned. We are talking
>  about sociopathy on a grand scale, and consumers remain at risk so long
>  as the issue is not being addressed. I say "sociopathy," by the way,
>  because traditional negative incentives like the threat of execution do
>  not necessarily motivate. 
>  

It's the callousness and the apathy that boggle my mind.  And make me
wonder:  how do Chinese view themselves in relationship to others?  Do
others even exist in their self-view?  Are they simply solipsistic?  When
you observe them moving through the streets, do they make eye contact as
they pass?  I apologize for the broad brush; certainly they are
individuals.  But do they never stop and think:  what if it was MY baby
that drank this?  MY child that played with the lead-laced toys?  My 
brother's child?  My neighbor's?  

Does it not occur to them that the general attitude that they display puts 
themselves at as much risk as their attitude does to others?
  

    
As far as manufacturing goes, the end customer is an abstraction. This
is the case in many manufacturing operations, but I believe the
cultural and geographic distances between the US and China widen the
gap. Henry Ford wanted his own workers to drive the kind of cars that
they produced, and think about the effect that this has on quality.
When a worker can imagine what it is like to use the product, the
likelihood is higher than quality can be improved. China managers talk
about a gap in "education" or "training" when they often mean that the
workers lack basic life skills. We struggled in some production
processes to explain what the products were. Rather than grasp the idea
of the product, workers concentrated on specifications. This was made
worse by a culture that places heavy emphasis on the outward appearance
(i.e., face) of a product, rather than on intrinsic values. 
  

    
Paul, you've done an *excellent* job of providing the news, I think
that what's in your book are not things that most Americans or other
Westerners know, certainly not to the degree of specificity of your
reports.  But we also need numbers and statistics -- that's not your job,
I understand that -- to help us understand whether
this is something specific to China, to Asian countries in general,
and what the overall rate of defective goods and harmful goods and 
how that compares to others -- regionally, historically, overall, and
normalized for other factors.  

When you get something like the melamine scandal it tends to
provoke emotional reactions, especially where children are involved,
and that does not necessarily result in good judgment or public
policy.  

> I've read your A, B and C options, and what seems missing is an option
> for China. Why is it that we have to do anything at all? Why can't the
> Chinese address the situation on their own?

Oh, absolutely the Chinese have to address the issue on their own - we
can't do anything about hat part. But the majority of your readers are
wondering how we in the West-- individually and collectively -- should respond.
You've seen people in this topic saying they are boycotting China or 
trying to avoid Chinese goods.  

> Regarding the suggestion that I offer more solutions, here is an easy
> one -- for China. Open an office that separately investigates claims
> filed by importers who believe they have been treated unfairly by their
> suppliers. What a public relations coup that would be for a country
> that has suffered so much damage to its reputation.

That's an excellent idea, and oes along well with some of the things
I've heard (and mentioned avove) about ADR and other
non-litigation-based remedies, especially with the teeth of government
enforcement.  

About the idea of the end user being an abstraction, I wonder if that
perception will begin to shrink as China's middle class and appetite
for consumer goods grows. May be it's not going to be like Henry Ford's
workers buying cars for a while, but if you look at the stores in
Chinese cities it's clearly not just rich people buying consumer goods. 
  

    
>I wonder if that perception will begin to shrink as 
>China's middle class and appetite for consumer goods 
>grows.

I think that depends on how large China's middle class becomes.  China
certainly has one now, but its buying power is really pretty weak.
 
I wonder how much buying power the government will ever let them have.
 
  

    
As I have mentioned, there is a great deal of denial surrounding the
issue. China has a quality problem. Of course it does. Remember that
for every major product recall there are literally hundreds of failed
products that never see a headline. 

Liberal thinkers want to deny the existence of a root problem. They
read headlines involving melamine and suggest that China has a "milk
problem." Before that, China was suffering a "toy challenge." And then
there was the "tire industry issue," and the "toothpaste concern." 

American politicians, needing to appear to be doing something, have
responded to this threat from China by doing what? By focusing on
specific product categories. We have tightened rules for lead in toys,
for example. Bravo. One of the problems that I point out in the book is
that we don't know where the next product failure will come from. Who
could have guessed at something like bad drywall, for example. It's
turned into a major crisis, something like "Katrina II."  

The evidence kept piling up anyway, and no one wanted to admit that
there might be a broader problem. 

As far as what can be done, it is *not* the consumer's responsibility
to direct foreign economic policy for this country. Consumers are
economic creatures. They will tend to purchase cheap products when they
are available, and consumers (rightly) presume that products on store
shelves meet generally accepted safety standards. You cannot fault
consumers for trying to save money, and I am vehemently against the
suggestion that average Americans are to blame for the quality crisis. 

Importers are really in the same boat, now. They have to go to where
products are cheapest, because business is a competition. In the end,
importers are playing a game that has been set up by policy makers.
Look to government if you want to find a root cause. 

The sluice gates were opened and we soon found ourselves twelve feet
under water. Let's not blame the water.  
  

    
Paul, now that you've shone a light on this issue, what kind of interest 
have you seen as you promote the book, assuming that your publisher has 
you on a book tour?  Have you seen any media interest?
  

    

>  Liberal thinkers want to deny the existence of a root problem.

A lot of us here are liberals and I don't think that's a true
characterization.
  

    
Also wondering why you characterize this as a "liberal" issue.

Paul, are you still working with importers in China?  Are you still
living in China?
  

    
There's been interest in the book, yes, and I have done interviews,
given a few talks. My publisher has not had me on the road, which is
one reason that a forum such as this one can be invaluable. The WELL
enables individuals to log in remotely and exchange thoughts on a
subject. For me, as a first timer, it's all experimental, and I hope
that others have found this opportunity worthwhile. 

I didn't mean to throw out "liberal" as a label. What I meant is that
some are sympathetic to the extreme. Rather than admit that cultural
differences exist, they prefer to indulge in fantasy. China = USA is
not a helpful framework.

The first step to improving an upside-down situation is to admit there
is a problem. After that comes discourse (i.e., what we are doing).
After that, we discuss opportunities and possible plans of action. I am
speaking about the quality issue here. Those who insist there is no
problem are not helping. They serve only to help guarantee that China
will deliver more problems of a serious nature going forward. I hate to
be "the boy who cried quality control," but I wrote about this issue
in an article two years ago (link below). There was a great deal of
public discussion that followed, but then guilt set in. The pendulum
swung back. We slipped back into denial. 

China is in desperate need of soul searching, and it must engage in
public dialogues on the issue of product safety and quality. It is
difficult to do this, by the way, in an environment where there is no
freedom of press. And dialogue cannot come in the form of top-down
directives from Beijing either. It must happen at the factory level,
and it must be genuine. The cat-and-mouse games that go on between
importers and suppliers need to be replaced with a new model, one that
has factory owners openly sharing information with customers. Importers
could be held accountable for quality failures, but as I have tried to
show, they really don't stand a chance against these super-savvy
industrialists. Importers are not in a position to guarantee anything,
and neither are third-party testers. Here's the article, which mentions
some of these points. This article is pre-drywall, pre-melamine, and
pre-countless-other-product-failures-out-of-China...

2007 Article:
http://www.forbes.com/2007/07/26/china-manufacturing-quality-ent-manage-cx_kw_
0726whartonchina.html
  

    
>I didn't mean to throw out "liberal" as a label. What 
>I meant is that some are sympathetic to the extreme. Rather
>than admit that cultural differences exist, they prefer to 
>indulge in fantasy. China = USA is not a helpful framework.

Is that being sympathetic to the extreme, or just terminally
politically correct?
 
  

    

I wonder if and how this might affect quality if you assume that this
might lead to a cultural shift:

The Chinese perceive that the values of Protestant Christianity have been
key to the economic development of the West. And they are explicit about
it.
...
it is significant that these are the thought leaders of China who are
beginning to take a look at what John Calvin may have to offer them as
they rev up their economy.

http://tinyurl.com/ndsdsc
<http://newsweek.washingtonpost.com/onfaith/undergod/2009/07/confucius_and_calv
in_how_faith_will_impact_us-china_relations.html>
  

    
I hope their religious wars are a little less devastating than ours
were.
  

    

Considering how fast Islam is growing in China if the article is
correct, one certainly hopes for some tolerance.
  

    
Last year, I met a successful, well-traveled man from China who
insisted that the Chinese government was keen on promoting
Christianity. He then went on to suggest that Confucianism was a tool
for controlling the people, etc. These thoughts are quite interesting,
but a bit off topic for me at this time.

Not sure how much Islam is "growing" in China. I have met young
Chinese who have joined a church. I haven't met many (aside from those
who intermarried) who converted to Islam. I'm assuming you have data to
support the claim, or that we are talking about demographics - i.e.,
population growth.
  

    
On quality, a couple quick links... 

http://www.walletpop.com/blog/2009/07/08/1-million-play-yards-recalled-after-h
undreds-collapse/

http://www.walletpop.com/blog/2009/07/29/new-cpsc-chief-speaks-softly-but-carr
ies-a-big-stick-in-china/
  

    
Thanks, Paul!

One question I always want to ask authors: What's the best story that
DIDN'T make it into the book?
  

    

> Not sure how much Islam is "growing" in China.

I'm not sure either which is why I qualified that statement since it
was based on the one web site I cited. Determining religious affiliation
is hard even in the US. Considering China, it has to be guesswork.
  

    
There's a pretty wide variety of ethnic/tribal/religious groups on the land
mass the world lumps together as 'China'. Paul wrote about his experience in
a relatively narrow (though populous and energetic) part of that.

Paul, I am also curious as to when you decided to write this book. Obviously
you had to conceal sources, go off the record, etc. as you gathered
material. But when did you decide to write the book? And why THIS book, as
opposed to some other book (culture shock, guide for aspiring entrepreneurs,
etc.)?

I thoroughly enjoyed the book and it gave me a deeper understanding of the
challenges we face with quality in China. Scared the hell out of me too.
  

    <scribbled by dfowlkes Tue 3 Jul 12 10:14>