"China is Killing China"

With all the recent news about the Mattel problems and the resulting suicide I found it interesting what the Chinese were saying about the issue. First, the view of the boss that killed himself is very very positive. Apparently he borrowed a ton of money and paid all of his employees prior to ending his life. The Chinese I’ve talked to say that it really wasn’t his fault; he was lied to by a friend about the chemicals in the paint that he bought. When I replied that he should have done QC on the incoming product the response is often: “yea, but this was a friend.” As if friendship makes procedures unnecessary. And yet almost to a T everyone’s conclusions all seem to be the same—“you can’t trust anyone.” This is important for anyone doing business here—because so much of business is done through friends there is a huge amount of trust between friends and a serious lack of QC. I was told it would be an insult to do QC on goods from a friend. What does that mean for you, the out-sourcer in China? It means that you’d better be hiring 3rd party QC/testing or your just asking for trouble.Second, my wife, who is Chinese, said of all the recent bad press about Chinese products: “China is killing China!” She has this week used this poor image of goods made in China as a tool when talking with factories about quality issues. This is the reality of the educated opinion in China—but will this opinion and the loss of face or poor international image ever change the way things are done here? My contention is no—at least not until the FDI starts showing up with tighter strings attached. Emotional decisions are, as we all know, prone to become less and less effective over time. The fact that people are riled up today doesn’t mean that production in China is going to change next month. It probably won’t. Immediate money issues are much more impactual on daily decisions than is an elusive “image of China” abroad.Third, what I’m really please about though, if there is a silver lining to a bad situation, is that every factory that I’ve visited in the last two weeks has brought this up to me—from Jiangsu to Ningbo to Shenzhen to Taiwan. They are all talking about it. It certainly has people worried. And that, I think, is a first step in seeing some positive result come of this.Finally I’m amazed (maybe I shouldn’t be) at the complete disconnect between what’s happening on the ground and the response from Beijing. The govt, almost in unison, has responded by attaching foreign governments for protectionism, blaming toy companies for causing an unnecessary scare, retaliated by “you do it to” product bans and basically done everything but take responsibility for the lack of enforcement in China.Certainly there are problems is other countries. Sure there are foreign firms working in China that are culpable. But the scares are real too. And enforcement in China is notoriously bad and nothing is being done to fix that at the level where it matters most—the production floor. It seams to me that regular Zhou-on-the-street understands that China is killing China, not foreigners in these cases.