A Supplier Quality Roundup — Chinese Style

In China, if you're a Chinese businessman or woman, unless you get on the bad side of a party official, you pretty much have carte blanche to carry out business as you see fit (provided you share in the profits with those who you would not want to offend). Previously, cutting corners on quality in industries where standards were not enforced by either local or Western organizations was all too often the norm. As I've always said about China -- and global sourcing in general for that matter -- you get out exactly what you put in.

But might things be changing as a result of all of the bad press surrounding China quality? Last week, European Leaders Blog reported on a round-up of 774 who "had been arrested over the past two months as part of a nationwide crackdown on counterfeit and sub-standard production." European Leaders Blog suggests that "the arrests are an illustration that China is finally prepared to take action to protect their battered reputation, although the US in particular will remain skeptical if the 'special battle' can be ever be won."

In my view, when China decides to clamp down, they do so quickly and with an iron whip. But they often do this to set an example rather than for retribution against those who have hurt China's reputation or negatively impacted Chinese society. The real question I have is when these witch hunts are over with later this year, whether or not we'll see lasting improvement in supplier quality in sectors and areas which typically go unmonitored. Unfortunately, my guess is that China will continue to focus on the short-term fix over the long-term solution. By way of comparison, shutting down the factories for a few weeks before the Olympics is not exactly going to have a permanent improvement on improving Chinese air quality, will it?

As a final aside, this post, and all of my others on China sourcing, are not meant as a knock on Chinese supplier performance and quality in export or even domestic markets where requirements and expectations are spelled out and monitored. Rather, my critical pen is aimed at those sectors which largely go unmonitored and need the most investment and prodding to improve their standards and safety.

Jason Busch

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