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Moulting of the Dragon – Part 1 of “Made in China”

19 Aug 2013

Made in ChinaIt’s no secret that there is a stigma amongst buyers across the globe associated with suppliers in China and the ‘Made in China’ seal of approval. Standards and specifications not being met, defects and delays in production, organizational problems, and ethical issues are commonly associated with Chinese suppliers.

Despite its flaws, China is still the “workshop of the world.” 70% of the global shoe production and 80% of toy production comes from China.

To counter the growing concern of being portrayed as low quality or problematic, Chinese suppliers are becoming more focused on customer service and are “seeking to establish stable relationships over the long term,” says Corinne Ceccoli, Cotecna’s Regional Consumer Goods Manager (Asia).

Industry veterans explain that such poor supplier performance in China is something that was very common a decade ago, but the image has stuck. A French manufacturer says, “ten years ago, I worked with really borderline factories. Since then, 4,000 of these suppliers have closed. Only the best remain.”

“Increased scrutiny of Chinese suppliers has had an effect of “skimming the bad,”” says Nicolas Bluchet, Managing Director at Expert Buy (Shanghai). “Word of mouth works a lot” and those that are consistently problematic are “blacklisted”. Karim Hayab, of Konaxis in Shanghai, recommends avoiding “factories that were launched and grew during the Deng Xiaoping era, which have very few real development strategies.” He prefers more recent suppliers who invest in supply chain processes and machinery to respond to specific requests, and who are generally aware of international standards.

It therefore comes as no surprise that research has confirmed a significant increase in the standard of quality of products delivered to the Chinese market as well as products in critical areas like food and children’s items.

Suppliers in China are struggling to manage recent economic factors such as increased wages, a high exchange rate on the Yuan, an unfavorable euro, etc… that were unheard of during the ‘golden days’. “This is why, ‘Made in China’ has become more expensive,” confirms Bluchet. “In the health sector, for example, the difference on the total cost between a product manufactured in China and one manufactured in Italy is now no more than 15%. It was 30% back in 2010.” With production prices steadily increasing in China, buyers are taking their business elsewhere.

In conclusion, one thing is certain: Chinese suppliers have no choice, if they want to stay in the race, they have to upgrade production and to put in place controls to ensure the production process complies with requirements. “You should never hesitate to explain to these suppliers seemingly obvious things … because nothing is obvious in China!”

Cotecna Inspection offers services in inspection, testing and supplier auditing to ensure that products manufactured in China meet your, and international, standards of quality. Contact us if you have any questions regarding an upcoming production, or Request a Quotation straight away.

Download the full article from Connexions magazine.