Problems When Dealing With Chinese Suppliers

If you are going to dance with the devil, you will get burnt. Read the following in order to minimize your ‘China stupidity’ exposure, or better yet, just go elsewhere with your production.

Excerpt

If you have experience in importing from Chinese suppliers, you know it’s very common that quotes are not handled with precision.
There are some basic yet deep-rooted reasons why suppliers in China quote incorrectly.
Precision: Suppliers in China do not quote with precision. The mindset is that the initial quote is not something that is going to make or break the project. The quote is viewed as sort of the starting point of discussion.
Details and specifications are not something firm that can readily be concreted and confirmed. Facts are “loose” and require back-and-forth.
Western buyer thinks: the quote needs to be as exact as possible so I can quote my buyer or rock n’ roll on these numbers so that we can close the job. Let’s get this right and get moving!
Chinese supplier thinks: here’s the quote and if it’s not exact or if you find any mistakes, holler back at me and we’ll get you fixed up.
From the suppliers’ mindset, nothing rides on that first quote. Whether or not you come back isn’t based on their quoting method.
The concept of going through an inquiry “with a fine-tooth comb” is not a common practice with suppliers in China.
The salesperson you work with from the supply company or factory doesn’t spend much time proofreading the quote or assuring they are quoting as per your specifications.
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Made in China- China’s Dirty Little Secrets Part 5

Great post here, I will provide excerpts below. This is from an interview with a guy named Paul Midler, a Wharton grad who authored the book, POORLY MADE IN CHINA. The guy has some good insight, and it mirrors my own experience in China.

“As a fix-it man for overseas importers and retailers sourcing from China, Paul Midler, a Chinese-speaking Wharton MBA grad, gained a unique perspective into the Made-in-China story. That experience, during which he worked with hundreds of Chinese factories, made him an eyewitness to the manipulation of product quality by factories and the other ways in which they bamboozled overseas businessmen and partners. In an interview to DNA Money’s Venkatesan Vembu, Midler, author of Poorly Made in China, reveals the dark secrets of the Made-in-China story. Excerpts:

You claim that the most bullish China analysts are the ones who don’t want to live in mainland China. What does the lived-in, grassroots experience of mainland China tell you that faraway analysts don’t see?

Right now, we’re in the middle of an economic crisis. When the book was being written, there was a much bigger gap between my understanding of the problems in China and the outside-in view of China as this paradise for investment or opportunity.

How do you have Wall Street analysts being so bullish on China when they’ve never seen what goes on over there and the problems there are in China? And when we’ve had some cautionary tales of people doing business and not succeeding, how can you acknowledge that it’s difficult to get things done in China – and yet hold this idea that there’s gold on the street? It’s quite a trick of the mind to be able to hold these two contradictory ideas.

One of my friends is a Hong Kong-based analyst. Like a lot of analysts, he talks about how he will be moving to Beijing (or Shanghai), but like a lot of analysts, he’s waiting for the “right time”. They never do it because in mainland China, the education system, the health system, pollution… it’s bad. It’s a huge irony; analysts are very happy to write about this fantastic phenomenon called China, but they just don’t want to be there. Something is not right here…

A great example is (US investor) Jim Rogers. He famously sold his Manhattan home and announced he was moving his family to China – because that’s where the global economic focus was shifting. Yet, after considering many Chinese cities, including Shanghai, Dalian and Qingdao, the ‘China bull’ finally settled in Singapore! There wasn’t a place in all of China that he would live in: can you imagine that! That’s the problem: there’s been a lot of bluster and a lot of boasting. You have to be a little frank with what you have here…

Made in China- China’s Dirty Secrets Part 4

Great post here, I will provide excerpts below. This is from an interview with a guy named Paul Midler, a Wharton grad who authored the book, POORLY MADE IN CHINA. The guy has some good insight, and it mirrors my own experience in China.

“As a fix-it man for overseas importers and retailers sourcing from China, Paul Midler, a Chinese-speaking Wharton MBA grad, gained a unique perspective into the Made-in-China story. That experience, during which he worked with hundreds of Chinese factories, made him an eyewitness to the manipulation of product quality by factories and the other ways in which they bamboozled overseas businessmen and partners. In an interview to DNA Money’s Venkatesan Vembu, Midler, author of Poorly Made in China, reveals the dark secrets of the Made-in-China story. Excerpts:

Why haven’t US consumer protection agencies, with their stringent regulations, been able to filter out low-quality goods from China?

One, these agencies are resource-constrained. The US Consumer Product Safety Commission, which is in charge of toys and things, just doesn’t have enough people. But even if they had, they just can’t inspect everything that comes into the US: the volume is too large. Most industries are self-regulated….

The other problem with these agencies is that when it comes to low quality, you have to know what you’re looking for. In China, you’re dealing with a partner who is not straightforward with you. A lot of counterfeiting goes on: the latest example of it is the Chinese Drywall, used in construction in the US, which is counterfeited, but although agencies in the US have been looking at it for months, nobody even knows what the fake material is. The Chinese aren’t helping either. If you don’t know what it is, how do you know what to look for? Now, with hindsight, everybody says, ‘Why weren’t we looking for melamine in milk?’ But a year ago, nobody even knew what melamine was.

When you send, say, a shampoo sample to the lab for testing, you can’t just tell the lab to make sure there’s no bad stuff in it. Labs charge by the screen, and want to know what screens to run. You have to tell them what you’re looking for. And each of those tests adds to the cost.

You also make the point that at some stage, some importers don’t want to know about quality problems.

Factories have their ways of making things cheap, and they don’t always disclose their production secrets. Sometimes we don’t want to ask. That way, we don’t know what they’re doing, so if something bad happens, we can say, ‘We didn’t know.’ But if we ask and we find out they’re using some chemical that’s not legal, we have a problem: now we know.

Why could not someone like you – who was on the ground in China (on behalf of importers) and who speaks the language, and who had access to factories –prevent Quality Fade and the other manufacturing tricks?

In matters like this, there has to be trust; there’s no other way to do it. For me to guarantee what’s in a shampoo, I shouldn’t have to stand in the factory on the days that they were mixing the shampoo, test every ingredient, ask them what they were putting in… There has to be a level of trust…

And you can’t trust Chinese manufactures?

I won’t say you can’t trust all the manufactures. But in China, it’s not just the number of quality failures that’s worrisome, it’s also the kind of quality failures. It goes beyond just accidents in the factory or negligence; it also goes beyond worker ‘laziness’ or a factory owner ‘cutting corners’. ‘Cutting corners’ is too benign an expression to describe some of the things that go on in China, where some people are going out of their way to ‘slip one past the inspectors’, as the melamine-in-milk scandal showed up.

Not all the quality failures are alike: some of them are more unethical than others; but it doesn’t get any worse than the melamine case. Dozens of companies were involved, which means potentially hundreds of people knew about it. So why didn’t people talk? Why aren’t there whistle-blowers in China? It’s because employees don’t want their factory – or China – to lose face, so they think it’s better to sweep it under the rug.

Chinese Bridge Collapses- Trash Substituted for Concrete

Those Penny pinching Chinese will do anything to save a buck, literally. Here is what demilishdestroy had to say about it

“When a bridge or any structure starts to collapse with no clear reason why you have to wonder if the ground it was built on is unstable or whether the original construction company did a less than perfect job?

In the case of the bridge you see above it is a clear case of dangerous construction in a bid to save money. The construction company, whoever they are, took the brilliant decision of cutting costs by using less concrete. Instead the cavities where concrete was required were stuffed with bags of rubbish and styrofoam.

The bridge is located in Shanghai on the Suzhou River Road. Problems were first spotted just after Christmas when cracks appeared in the structure followed by a partial collapse. Further investigation found garbage bags, styrofoam, and general wood and plastic waste stuffed inside load-bearing sections of the bridge”

The funny thing is that the Chicom daily reported that the citizens were angry, but told some untruths to make the scene not so mind blowing. Instead of saying that the bridge had been built in an atrocious and faulty manner, they said that aftr the collapse, the workers tried to fill the holes with trash.

Truth Chicom style.