11/15/2007

Chineese Crackdown

This article here talks about how over the past 2 months they have arrested 774 people related to the recent unhealthy and dangerous products including lead-based paint on toys and poisonous dog food.

China has become the Japan of decades ago when all of their products were considered cheap and junk. Since then they have become models of productivity and quality. China is recognizing this implication and wishes to improve their reputation as they are quickly becoming a developed country and a sizable force in the global market. How long until China will rival Japan for productivity and quality?

5 comments:

Hailey said...

People push and push for the lowest possible cost for items. We had to see this coming, and I'm surprised it took so long for a crackdown like this. Logan is right, China is going to have to do some major work to reclaim its reputation of being a quality, low cost supplier.
Something that really shocked me was the photograph. No wonder these problems are occurring. Look at the environment these people are trying to work in.
This makes me wonder if anything will happen to Chinas exploding economy.

Dr. Tufte said...

I also think this is a good time to emphasize the benefits of sunk costs and branding. Without those, it isn't clear how much the Chinese actually lose in this situation.

William said...

Dr. Tufte,
I think you make a valid point when you say this is a sunk cost. I think our society so often focuses on these sunk costs instead of realizing them and moving forward they heavily keep focusing on them. We need to accept what happened and either continue to use China’s products, pay more for a better quality product, or find another country that can make a similar product for the same costs.

Reagan said...

Dr. Tufte-Extra Credit

Having imported product from China I have seen how the Chinese handle the issue of low quality. Just like you said there are benefits to sunk cost. They did not ignore the issues we had with the product and when we experienced failure in the product we described what it was and the factory fixed it. Not all factories are like this in China but the several that we dealt with were very responsive and concerned with problems. They understand Americans want quality but they also let you know increased quality means increased prices. I can honestly say that the Chinese companies we dealt with didn't lose when quality was bad. They didn't have a name attached to the product and they always improved the product when addressed a problem. There are definitely benefits when you anonymous and can treat these issues like sunk costs.

Dr. Tufte said...

-1 on Reagan for poor grammar.

William has made a good point, and a similar one was made on other posts about Cuba.

Having said that, this isn't what I meant. I was speaking more to the sunk cost in developing a brand reputation that helps ensure that companies make decent products. We don't see that with Chinese firms.

Reagan makes a really useful addition here, but to put in context, what the Chinese are currently doing is paying in those sunk costs, but we are not benefitting from them as much yet.