What Are We to Make of Junky Chinese Imports?

There are a lot of things to think about, and a lot of ways to assess the stream of flawed and dangerous Chinese imports, the accumulation of which has lately captured the public and media imagination. (We touched on the issue briefly here; a new book by Sara Bongiorni, A Year Without “Made in China”: One Family’s True Life Adventure in the Global Economy, is suddenly very au courant.)

What are the big-picture thoughts to take away from this? The opinion pages of the Wall Street Journal and New York Times today offer vastly divergent ideas, neither of which will be surprising to the papers’ regular readers, but which, taken together, show just how much there is to think about the China effect.

The Journal piece is by Jeremy Haft, himself the author of a new China book: All the Tea in China: How to Buy, Sell, and Make Money on the Mainland. His OpEd is called “The China Syndrome,” and its thesis is well delivered in its lead:

What could be reassuring about killer Chinese toothpaste, toys and tires? Hard to believe, but there’s a silver lining. The rash of product recalls reveals that China is not the manufacturing juggernaut we fear — and that America has an edge we tend to overlook.

Haft goes on to chronicle a variety of reasons — inefficiencies, corruption, lack of oversight, etc. — that foretell a continuing trend in Chinese trouble.

The Times piece is an unsigned editorial headlined “Killing the Regulator.” It, too, takes note of various Chinese shortcomings and it, too, searches for a silver lining in the trouble. But, instead of sounding a rallying cry for American businesses to exploit Chinese weaknesses, as the Journal piece implicitly does, the Times piece calls for more regulation — first from the U.S. side, until China gets its house in order:

What China needs is an effective and transparent regulatory system and a clear understanding that its export boom will suffer if it continues to sell tainted food, toys and toothpaste. Until that happens – and there is no guarantee that it will – American regulators will have to do more to screen Chinese imports to protect American consumers.

Whereas the Journal piece ends on an up note — “Remember, these recalls tell us as much about China as they do about America,” Haft writes. “The silver lining is our inherent strength” — the Times piece concludes with a dark, dark view of the future, courtesy of the President:

Unfortunately, the Bush administration has spent the last five-plus years emasculating the American regulatory system. The Consumer Product Safety Commission has seen its budgets repeatedly cut. The Food and Drug Administration has not received the resources it needs and today inspects only a minute share of all imported food.

It is hard to imagine anything good coming out of the China export scandals. But perhaps they will persuade Congress’s new Democratic leaders that America also needs a stronger and more transparent regulatory system.

As I’ve written before, reading the two newspapers’ opinion pages is as entertaining as listening to one of those excellent arguments that temporary husbands and wives have on Wife Swap. In this case, as least there’s a lot worth arguing over, and a lot at stake.


zatavu

In other words, what China needs is the protection of property rights and an independent judicial system. Producers have to have something at stake -- without an independent judicial system, lawsuits remain political, and without property rights, nobody has anything they can lose.

Right now China has a mercantilist economy, like the one Europe has at the end of the Middle Ages through the Renaissance. The good news is that, historically, the next step is capitalism. The bad news is that right now we have to deal with a system that treats the economy as a zero-sum game.

chinalawblog

Zatavu has it right that it is going to take a long time for China to become a safe place in terms of product and it is not going to be the government that gets it there. It is going to get there because it will need to get there to compete as its wages increase. It happened with Japan and then Korea and it will happen with China also. In the meantime, American companies must be on their guard and take all appropriate measures to protect themselves.

adorita

Many so-called Made-in-USA products are in fact manufactured by Chinese and Vietnamese workers in US foreign base in Asia. These areas are given zip codes APO/FPO and are indeed counts as US soil.

It was on the news in the late 90's in Asia. Chinese workers from the rural west were promised US Green Cards to work in USA. But they were actually taken to US arm base in Asia to work in sweatshops. These sweatshops are far worst than the ones in China. They were not allowed to contact their families, pregnant women are forced to have abortion, many were imprisoned for over a decade - much like underground sex workers.

These people were threaten if they run away, they and their families will be prosecuted by Chinese government. They worked over 18 hours a day, with absolutely no pay but only food and prison-like rooms.

My neighbors were the ring leader and owners of these "American Factories". (You really can't tell what a person is really like from looking.) They manufactured for Gap, Tommy Hilfiger, DKNY and many American brand clothings. Their factories are closed now and they are still in trial in Hong Kong. Journalist in Hong Kong suspects there are still tons of these factories around the world.

So I often doubt if things are really "Made in USA" or if that really matters. I do love Made-in-Japan products, however.

Read more...

jfaughnan

Wow, you really whimped out on this one. I was looking forward to hearing what you thought, instead you dodged it completely. Every economist I read has run for cover rather than comment on this topic.

vbburkly

As a recent victim of a made in china purchase and nightmare,from no other than an american front company i can honestly say that,we as americans are lucky to be alive at all.It may not be china whose poor workers suffer so horribly for so little reward.And are ok with substandard products and services,the chinese manufacurer probably made very little or no profit at all from the sale,the veteran businessman did however and a fairly fat one too.So whose to blame the importer or exporter.By the way my Father and Brother were veterans also,does that entitle me too be unethical too.-Posted by Peedon in the US.LOL

JANEY

LOL

zatavu

In other words, what China needs is the protection of property rights and an independent judicial system. Producers have to have something at stake -- without an independent judicial system, lawsuits remain political, and without property rights, nobody has anything they can lose.

Right now China has a mercantilist economy, like the one Europe has at the end of the Middle Ages through the Renaissance. The good news is that, historically, the next step is capitalism. The bad news is that right now we have to deal with a system that treats the economy as a zero-sum game.

chinalawblog

Zatavu has it right that it is going to take a long time for China to become a safe place in terms of product and it is not going to be the government that gets it there. It is going to get there because it will need to get there to compete as its wages increase. It happened with Japan and then Korea and it will happen with China also. In the meantime, American companies must be on their guard and take all appropriate measures to protect themselves.

adorita

Many so-called Made-in-USA products are in fact manufactured by Chinese and Vietnamese workers in US foreign base in Asia. These areas are given zip codes APO/FPO and are indeed counts as US soil.

It was on the news in the late 90's in Asia. Chinese workers from the rural west were promised US Green Cards to work in USA. But they were actually taken to US arm base in Asia to work in sweatshops. These sweatshops are far worst than the ones in China. They were not allowed to contact their families, pregnant women are forced to have abortion, many were imprisoned for over a decade - much like underground sex workers.

These people were threaten if they run away, they and their families will be prosecuted by Chinese government. They worked over 18 hours a day, with absolutely no pay but only food and prison-like rooms.

My neighbors were the ring leader and owners of these "American Factories". (You really can't tell what a person is really like from looking.) They manufactured for Gap, Tommy Hilfiger, DKNY and many American brand clothings. Their factories are closed now and they are still in trial in Hong Kong. Journalist in Hong Kong suspects there are still tons of these factories around the world.

So I often doubt if things are really "Made in USA" or if that really matters. I do love Made-in-Japan products, however.

Read more...

jfaughnan

Wow, you really whimped out on this one. I was looking forward to hearing what you thought, instead you dodged it completely. Every economist I read has run for cover rather than comment on this topic.

vbburkly

As a recent victim of a made in china purchase and nightmare,from no other than an american front company i can honestly say that,we as americans are lucky to be alive at all.It may not be china whose poor workers suffer so horribly for so little reward.And are ok with substandard products and services,the chinese manufacurer probably made very little or no profit at all from the sale,the veteran businessman did however and a fairly fat one too.So whose to blame the importer or exporter.By the way my Father and Brother were veterans also,does that entitle me too be unethical too.-Posted by Peedon in the US.LOL

JANEY

LOL