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Nhà máy gia công toàn cầu: Vén màn bí mật những chiến thuật sản xuất "Made in China"
Cuốn sách phơi bày sự thật đằng sau những nhà máy gia công toàn cầu ở Trung Quốc. Thông qua các mẩu chuyện kể, Paul Midler chỉ ra rằng, hoạt động sản xuất ở Trung Quốc không có khái niệm trừng phạt để đền bù thiệt hại hoặc trừng phạt vì hành vi bất lương, hay các nhà máy Trung Quốc rất miễn cưỡng khi phải thừa nhận họ có lỗi và sự bất đồng giữa nhà nhập khẩu với các nhà máy thường kết thúc theo kiểu “ông nói gà, bà nói vịt”. Hoạt động sản xuất ở Trung Quốc, theo tác giả là một trò chơi nhưng không hề có trọng tài, không có cơ quan chính phủ nào chịu chấp nhận đơn khiếu nại của nhà nhập khẩu và có rất ít cơ hội nhờ cậy tới hệ thống pháp luật ở đây. Và do đó, bài toán bất đồng giữa nhà nhập khẩu và các nhà máy bị bỏ ngõ…
Còn rất nhiều phát hiện của Paul Midler về thế giới sản xuất của Trung Quốc. Qua cuốn sách, bạn đọc có thể khám phá ra nhiều chuyện ngạc nhiên lẫn buồn cười về cuộc sống và kinh doanh ở Trung Quốc, lột trần những chiêu thức nguy hiểm diễn ra tại các công ty Trung Quốc.
Còn rất nhiều phát hiện của Paul Midler về thế giới sản xuất của Trung Quốc. Qua cuốn sách, bạn đọc có thể khám phá ra nhiều chuyện ngạc nhiên lẫn buồn cười về cuộc sống và kinh doanh ở Trung Quốc, lột trần những chiêu thức nguy hiểm diễn ra tại các công ty Trung Quốc.
269 pages, Paperback
First published March 23, 2009
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Displaying 1 - 30 of 282 reviews
February 10, 2017
The author of the book is an American who has lived in China for a long time and as he speaks the language is an ideal agent or go-between for American companies and Chinese manufacturers. He relates one example of Chinese cost-cutting that I believe illuminates the whole business ethos of China. A company that has a number of cheap brands of shampoo and similar toiletries that are sold by the big box stores in the States gave a contract with a Chinese company to make them.
One day one of the retailers told the company CEO that the bottles had collapsed, the plastic bottles were too thin to withstand the pressure of the liquids within and stacking etc. What had happened was that with ever shipment the Chinese company had shaved off a small amount of the plastic going into each bottle. Such a small amount that it wasn't noticed, until one day the bottles were just too weak
It is obvious that the Chinese were making more profits by cost-cutting, but they said that it was the only way they could stick to the contract price. If the American wanted better company bottles they would have to pay more.
That's a different business model entirely than I learned at London uni.
__________
"The purpose of religion is to supply multi generational groups with an explanation of where they have come from and where they are going. It also supplies a moral code of conduct. 'Religio' comes from the Latin 'to bind together' and its purpose through the ages has been to help groups to stay tight. In part by distinguishing the in group from the separate out group."
The author is saying that history replaces religion in China, certainly since the Communist era. But the book makes it clear that the reigning god (and they are quite monotheistic in this) is Profit. The commandments are as follows:
1. Profit is to be worshipped above all other gods.
2. It is unethical to tell the truth to foreigners if that would lose a contract.
3. Pricing is according to what the customer will pay and that depends on what market the customer is going to sell in.
4. Lying about having manufacturing facilities, products and machinery can be a good thing.
5. Showing a customer around a factory that is not yours or is empty but has been set up for the day in order to get a contract.
6. Over time cutting costs which reduces product quality is a very good thing as it increases Profit.
And so it goes.... we are all mugs to Chinese manufacturers but
7. Always maintain the face of dignity and shining honesty to a customer even when in the wrong.
Mattel, the big toy company, fell foul of the Chinese. They had to recall nearly 21 million toys because some had been coated in lead paint. You can be sure that the Mattel contracts had specified lead-free paint and the samples and possibly years of manufacturing had been without problems. But then the manufacturer had either bought leaded paint because it dried quicker or contracted out the product line and the factory down the line just cut costs wherever it could as it wasn't making much anyway.
However, and here is the surprise, it was not the Chinese who did the apologising, it was Mattel, who had to make a humiliating apology to the Chinese government for the damage to the reputation of Chinese manufacturers and the consequent loss of so many valuable contracts and took full responsibility for everything, including bad product design. The truth of the matter is that the Chinese are very good at turning around their failures, either accidental, deliberate or out-and-out scams and getting the foreigner to take the blame.
Reminds me a bit of how in some Arab countries rape victims are immediately imprisoned for having sex outside marriage and are sometimes even murdered as they have now brought dishonour on the family by being the victim of a crime. The criminals, the rapists almost always get away with it. It's a shared mindset. The dominant group, the people who can impose penalties will do so. The religion of Profit (like the religion of Misogyny by any name you wish to call it) allows for no mercy to those who would speak against it. That's how slavery worked too.
One day one of the retailers told the company CEO that the bottles had collapsed, the plastic bottles were too thin to withstand the pressure of the liquids within and stacking etc. What had happened was that with ever shipment the Chinese company had shaved off a small amount of the plastic going into each bottle. Such a small amount that it wasn't noticed, until one day the bottles were just too weak
It is obvious that the Chinese were making more profits by cost-cutting, but they said that it was the only way they could stick to the contract price. If the American wanted better company bottles they would have to pay more.
That's a different business model entirely than I learned at London uni.
__________
"The purpose of religion is to supply multi generational groups with an explanation of where they have come from and where they are going. It also supplies a moral code of conduct. 'Religio' comes from the Latin 'to bind together' and its purpose through the ages has been to help groups to stay tight. In part by distinguishing the in group from the separate out group."
The author is saying that history replaces religion in China, certainly since the Communist era. But the book makes it clear that the reigning god (and they are quite monotheistic in this) is Profit. The commandments are as follows:
1. Profit is to be worshipped above all other gods.
2. It is unethical to tell the truth to foreigners if that would lose a contract.
3. Pricing is according to what the customer will pay and that depends on what market the customer is going to sell in.
4. Lying about having manufacturing facilities, products and machinery can be a good thing.
5. Showing a customer around a factory that is not yours or is empty but has been set up for the day in order to get a contract.
6. Over time cutting costs which reduces product quality is a very good thing as it increases Profit.
And so it goes.... we are all mugs to Chinese manufacturers but
7. Always maintain the face of dignity and shining honesty to a customer even when in the wrong.
Mattel, the big toy company, fell foul of the Chinese. They had to recall nearly 21 million toys because some had been coated in lead paint. You can be sure that the Mattel contracts had specified lead-free paint and the samples and possibly years of manufacturing had been without problems. But then the manufacturer had either bought leaded paint because it dried quicker or contracted out the product line and the factory down the line just cut costs wherever it could as it wasn't making much anyway.
However, and here is the surprise, it was not the Chinese who did the apologising, it was Mattel, who had to make a humiliating apology to the Chinese government for the damage to the reputation of Chinese manufacturers and the consequent loss of so many valuable contracts and took full responsibility for everything, including bad product design. The truth of the matter is that the Chinese are very good at turning around their failures, either accidental, deliberate or out-and-out scams and getting the foreigner to take the blame.
Reminds me a bit of how in some Arab countries rape victims are immediately imprisoned for having sex outside marriage and are sometimes even murdered as they have now brought dishonour on the family by being the victim of a crime. The criminals, the rapists almost always get away with it. It's a shared mindset. The dominant group, the people who can impose penalties will do so. The religion of Profit (like the religion of Misogyny by any name you wish to call it) allows for no mercy to those who would speak against it. That's how slavery worked too.
February 6, 2017
While I enjoyed the book, I thought it gave a limited glance on the reality of Chinese companies, especially manufacturers. First of all, the book is written from the point of view of low-skill product importers in the USA. That's a valid point of view but doesn't represent everyone who manufacture in China. Besides, the book is written in 2010 and most of the experiences recounted are from the early 2000s. Between now and then, China improved substantially. For example, a reader of the book would have a hard time reconciling the fact that one of the highest quality and best selling smartphones in the world today, the Apple iPhone, is being manufactured in China.
The manufacturing companies mentioned in the book are usually opportunistic and try to manipulate the quality of products and cut corners in order to maximize their profits. There is in fact a tendency to chalk up manufacturing in China as irredeemably prone to the phenomena of cutting corners, (knows as Chabuduo in Chinese). However, these perspectives ignore the gains in productivity the Chinese economy have seen, the improved infrastructure of the country in recent years and the increased skills of the Chinese labor, among other things.
The book is also vulnerable to selection bias. Namely, if you have many experiences in China and set out to write a book about poor manufacturing, you are bound to select from your experiences examples that confirm what you set out to write about in the first place. The book doesn’t systematically analyze what percentage of whatever made in China is poorly made. This for me highlights the importance of case by case analysis when it comes to working with China, especially in light of the fact that many high quality products are being manufactured in China today.
All being said, the book is an enjoyable read and sometimes very funny. While I don't recommend it as a guide to do business in China, I do recommend it as a lighthearted read of someone's intriguing experiences with the cunning of Chinese manufacturers!
The manufacturing companies mentioned in the book are usually opportunistic and try to manipulate the quality of products and cut corners in order to maximize their profits. There is in fact a tendency to chalk up manufacturing in China as irredeemably prone to the phenomena of cutting corners, (knows as Chabuduo in Chinese). However, these perspectives ignore the gains in productivity the Chinese economy have seen, the improved infrastructure of the country in recent years and the increased skills of the Chinese labor, among other things.
The book is also vulnerable to selection bias. Namely, if you have many experiences in China and set out to write a book about poor manufacturing, you are bound to select from your experiences examples that confirm what you set out to write about in the first place. The book doesn’t systematically analyze what percentage of whatever made in China is poorly made. This for me highlights the importance of case by case analysis when it comes to working with China, especially in light of the fact that many high quality products are being manufactured in China today.
All being said, the book is an enjoyable read and sometimes very funny. While I don't recommend it as a guide to do business in China, I do recommend it as a lighthearted read of someone's intriguing experiences with the cunning of Chinese manufacturers!
February 5, 2016
This book is just superb. It is so much better--more informative and more useful--than any dozen "succeed in business" books one could buy.
Midler has worked in China for years, knows Mandarin, and sees how companies rush to produce goods in China due to its lower costs. China welcomes US and other importers with red-carpet treatment and business-friendly protocols, but once production in China is established, factory owners start engaging in "quality fade." For example, a factory owner may use thinner plastic, or unilaterally change a formulation or, as we have seen, opt to use lead paint. It becomes clear that Chinese quality issues about which we have read are not the exception but the rule.
I applaud Midler's willingness to write this book and Wiley & Sons to publish it. As important a subject as Chinese manufacturing is, there is virtually no other source that is so honest and detailed.
Recommended for all who like business books or who are contemplating doing business in China.
Midler has worked in China for years, knows Mandarin, and sees how companies rush to produce goods in China due to its lower costs. China welcomes US and other importers with red-carpet treatment and business-friendly protocols, but once production in China is established, factory owners start engaging in "quality fade." For example, a factory owner may use thinner plastic, or unilaterally change a formulation or, as we have seen, opt to use lead paint. It becomes clear that Chinese quality issues about which we have read are not the exception but the rule.
I applaud Midler's willingness to write this book and Wiley & Sons to publish it. As important a subject as Chinese manufacturing is, there is virtually no other source that is so honest and detailed.
Recommended for all who like business books or who are contemplating doing business in China.
This entire review has been hidden because of spoilers.
July 29, 2009
I was expecting something drier, with more statistics. In fact, this is a narrative of the author's experience as a business consultant working with importers from the US and manufacturers in China. It was a pleasant surprise, fast-paced and worth reading.
The ethics (or lack of ethics, to be truthful) and self-serving and/or delusional behavior of both parties in these relationships are on display here - although there are some detours into Chinese culture as well. The author believes he is making a point about trade - that we should have thought more when we began working with China so blindly, but we've got to continue now, there's no going back, and if you're not manufacturing in China you ought to be - but often contradicts that point with incredible stories about manufacturers having importers over a barrel, quality problems that are ignored by all parties and governments, and the overwhelming sense that there is more to the moving-factories-overseas debate than just protecting American jobs.
Having rarely worked for private companies, I found myself astonished at the complete denial of any moral or political responsibility on the part of all the businesspeople involved, the author included, although he may be assuaging his conscience by writing this book. At times, it took my breath away that the author was able to explain away his scruples by remarking that he wasn't in the business of irking his customers by telling them what they refused to hear. This is not to be too critical of Midler - but it is fascinating to read what he thinks the lesson of his story is when your lesson from it is so different.
The ethics (or lack of ethics, to be truthful) and self-serving and/or delusional behavior of both parties in these relationships are on display here - although there are some detours into Chinese culture as well. The author believes he is making a point about trade - that we should have thought more when we began working with China so blindly, but we've got to continue now, there's no going back, and if you're not manufacturing in China you ought to be - but often contradicts that point with incredible stories about manufacturers having importers over a barrel, quality problems that are ignored by all parties and governments, and the overwhelming sense that there is more to the moving-factories-overseas debate than just protecting American jobs.
Having rarely worked for private companies, I found myself astonished at the complete denial of any moral or political responsibility on the part of all the businesspeople involved, the author included, although he may be assuaging his conscience by writing this book. At times, it took my breath away that the author was able to explain away his scruples by remarking that he wasn't in the business of irking his customers by telling them what they refused to hear. This is not to be too critical of Midler - but it is fascinating to read what he thinks the lesson of his story is when your lesson from it is so different.
June 25, 2022
A fascinating tale, written by a foreigner who calls China home - to the affront of the locals - and speaks mandarin. It shows how Western companies are drawn into the iron grip of Chinese suppliers who cheat them at every turn they can.
March 4, 2012
I just finished Poorly Made in China and wanted to highlight some of my key takeaways in the book. The book recently made The Economist's Book of the year list (Book review - The Economist). Paul Midler has lived in China for over 15 years and worked as an outsourcing consultant for small-to-mid-sized companies on a range of products. He wrote the book because he was shocked at what he saw. The book was written as a response to the string of 2007 Chinese quality scandals (yes, it even it's own Wikipedia page; and 2008, and then there's Chinese Drywall). It took him a year and a half to finish, so it sort of had a quiet launch, until The Economist picked up on it.
The book is not an overview of the 2007 quality scandals. He references them only briefly. Some interesting notes: the infamous Mattel lead paint toys case involved a Chinese factory owner who had worked for Fisher Price for 15 years and had an estimated net worth of ~900 million USD. It was a symptom of what Midler refers to as "Quality Fade."
Here's an article he wrote in 2007 (that also served as the seed for the book) about quality fade: Dealing With China's 'Quality Fade' - Forbes.com
Some of the other takeaways:
* The reason China does so well initially attracting business is: #1 very, very low crime rate (at least for Westerners), #2 low initial price point (although subject to rises over time), #3 zero regulation (want to discharge wastes from a galvanizing operation directly into the sewer? No problem!), #4 ease of access (a business traveler can get a cheap ticket over there, then stay in very inexpensive hotels, and come back to the US for less than he budgeted; comparable trips to Mexico or Dominican Republic are extremely costly due to security constraints).
* Chinese factories deliver low prices because they'll sell at-cost to US markets, then sell knockoffs of the same products to Latin America, Mid-East, etc. for double/triple the price they're selling it to the US (generally "borrowing" the intellectual property/design/etc. in the process).
* Chinese factories are described as 'almost mid-evil' level of technology. The average factory is a series of long tables, with lines of stools (generally without backs, made from scrap wood) with massive amounts of human labor substituting for what machines would do in the West. I've been to a few US factories and it's amazing the level of technology you'll see; so long as it lowers the marginal cost and there's enough volume, you'll see lines of the most expensive computer-controlled CNC machines. The only machinery in Chinese factories is generally worn-out, obsolete equipment from the West.
* China is not THE lowest cost producer. Vietnam generally beats them out on labor costs.
* There's a bias out there that "Made in America" is too expensive, while "Made in China" guarantees you're getting a good deal (at least on price). Say you want to buy bolts. A Chinese factory quotes you 68 cents/ea.. You think you're getting a good deal. If you go to a US factory and they quote you 68 cents and "Made in America", people think they can get it cheaper elsewhere. A US manufacturer, thanks to automation, mechanization, and superior methods, might actually be the less expensive manufacturer, while a Chinese manufacturer may only meet that price point while sacrificing something (namely, quality).
* A lot of the business-people in China, especially among the lower-to-mid-size companies are incredibly naive. Those are the best stories in the book. A Chinese factory was making 'private-label' beauty products for an un-named CVS/Walgreens/etc. and the 'CVS' buyer kept complaining they were getting 'screwed out of pH'. The pH was on the lower end tolerance range (~6 in a ~6-7.5 range). Meanwhile, the factory was doing all sorts of other substitutions behind their back that they weren't even checking. Upon being challenged, the 'CVS' buyer didn't even know what pH was, much less have the idea to test for bacterial contamination of the lots of body wash, shampoo, etc. that were coming into their store by the shipload. Because they didn't know how to make anything, they had no idea how a manufacturer could screw them over. The Chinese product had a "not tested on animals" label, primarily because there was no testing done whatsoever!
One of the things I enjoyed about the book is it's a business book, but there's very little 'business' in it; it's mostly about relationships and Chinese culture. That's also this reviewer's take. Some of the cultural nuances were remarkably like America, in a way.
Also worth a look: Paul Midler's Blog. Especially the older entries.
Also of note: Dumping China for America - CNN Money
-------------------------------
On a personal note: one of the reasons I've become interested in this book is I've gotten into valve procurement in a big way. The valve business is very, very competitive and a valve you bought 10-15 years ago that used to made in the USA with a good reputation for quality is now either 'assembled in the USA' (with Chinese-made parts) or wholly-made in China due to commercial pressure. I was at a meeting when we went through valves and name after name was "made in China" (partly or completely), I asked 'is there anyone who isn't?', the older engineer looks over at me and says, "yeah, Company Z. Their valves are made in India" Me: "Um..."
Now, we try do as much as possible to test the valves and to screen out the worst offenders, but the whole process has left me with some uneasy feelings. The valve salesman won't be around when the project starts up. I will and the operators will work next to these valves for years to come.
Note that Paul Midler ends his book with a GUARANTEE of further Chinese quality scandals.
http://noladishu.blogspot.com/2012/02...
July 20, 2017
This is an interesting read, many tactics employed by Chinese manufacturers (in this book, shampoo, healthcare products) are similar in daily life in Viet Nam. This is some real good but painfully learnt experiences of the author as a intermediaries between American companies and Chinese manufacturers.
1/ First they welcome you with open arms, sometimes with fake showrooms, previously made products for famous multinational corporations.
2/ They begin to make your products, copy the sample beautifully, the first dispatch usually looks perfect. Overtime, quality starts to fade away since there are myriad of ways to cut cost, e.g substituted with cheap ingredients, thinner and thinner plastic bottles till they collapses under their weight, cheap labor with horrible working conditions...
3/ If something bad happen (an error with packaging for example), they make process of remediation to be hell for orderers: shift the blames, unreasonable excuses, threaten to serve the contract... This can happen if those manufacturers are big, backed by local government officials, have many connections to other manufacturers and that leads to more power.
But note that the author also understands his limited experiences in manufacturing sector, this can not be counted as comprehensive view for all Chinese manufacturers.
1/ First they welcome you with open arms, sometimes with fake showrooms, previously made products for famous multinational corporations.
2/ They begin to make your products, copy the sample beautifully, the first dispatch usually looks perfect. Overtime, quality starts to fade away since there are myriad of ways to cut cost, e.g substituted with cheap ingredients, thinner and thinner plastic bottles till they collapses under their weight, cheap labor with horrible working conditions...
3/ If something bad happen (an error with packaging for example), they make process of remediation to be hell for orderers: shift the blames, unreasonable excuses, threaten to serve the contract... This can happen if those manufacturers are big, backed by local government officials, have many connections to other manufacturers and that leads to more power.
But note that the author also understands his limited experiences in manufacturing sector, this can not be counted as comprehensive view for all Chinese manufacturers.
October 18, 2016
Although I have no first-hand experience with manufacturers in China, I suspect that this book is badly biased.
The author wants to prove that manufacturing standards in China are unusually poor, so gives various examples of nothing but, most of them from the same small company.
As he mentions in passing at the end of the book, a lot of brand name goods are manufactured in China. It's fair to assume that companies like Apple and Johnson & Johnson aren't going to accept low quality manufacturing. I'm sure another author could embed with other manufacturers and write a book praising how advanced and well organized they are.
Most troubling to me is his suggestion that cheating the buyers is something ingrained in Chinese culture, supposedly due to the hard times they experienced under Mao. That's a rather insulting accusation, backed by just some anecdotes.
The author wants to prove that manufacturing standards in China are unusually poor, so gives various examples of nothing but, most of them from the same small company.
As he mentions in passing at the end of the book, a lot of brand name goods are manufactured in China. It's fair to assume that companies like Apple and Johnson & Johnson aren't going to accept low quality manufacturing. I'm sure another author could embed with other manufacturers and write a book praising how advanced and well organized they are.
Most troubling to me is his suggestion that cheating the buyers is something ingrained in Chinese culture, supposedly due to the hard times they experienced under Mao. That's a rather insulting accusation, backed by just some anecdotes.
June 22, 2017
The book is a bit different than I was thinking, The book was telling diaries of the businessman and his experiences with importing and trading in China. It was fun and informative regarding the work there but enough! Nothing more, nothing to be considered or said about the social, cultural and psychological perspectives of Chinese, as the writer wasn't concern about these matters entirely.
كتاب سيرة ذاتية على شكل مذكرات لتاجر امريكي يقيم في الصين لمدة طويلة، يدون فيه تجاربه وخبرته في التجارة والصناعة، الكتاب يحتوي على معلومات قيمة جداً للاحوال والاوضاع للمعامل الموجودة في الصين، ويتناولها من اطار تجاري بحت، وهذا ما عاب الكتاب بنظري صراحةً، لانني تمنيت ان اجد فيه البعض من الاطر الاجتماعية والنفسية للصينيين.
كتاب سيرة ذاتية على شكل مذكرات لتاجر امريكي يقيم في الصين لمدة طويلة، يدون فيه تجاربه وخبرته في التجارة والصناعة، الكتاب يحتوي على معلومات قيمة جداً للاحوال والاوضاع للمعامل الموجودة في الصين، ويتناولها من اطار تجاري بحت، وهذا ما عاب الكتاب بنظري صراحةً، لانني تمنيت ان اجد فيه البعض من الاطر الاجتماعية والنفسية للصينيين.
January 21, 2021
Một cuốn sách thú vị về một chủ đề thiết thực. Tại sao hàng hóa TQ lại có thể rẻ như vậy? Sao nhà sản xuất sẵn sàng sản xuất những loại hàng hóa "có thể tạm chấp nhận được" với mức giá khiêm tốn như thế? Họ được lợi gì? Cách người TQ kinh doanh và kiếm lời như thế nào đều được giải thích một cách rất dễ hiểu.
Có điều giọng văn của tác giả hơi gay gắt chút.
Có điều giọng văn của tác giả hơi gay gắt chút.
September 12, 2020
Wow, this one was great! I wasn't sure what to expect; this is a book about manufacturing in China, after all...
Author Paul Midler is a middle-man of sorts. He lives in China and speaks fluent Mandarin. He acts as a go-between for his Western clients, and the factories of southern China who produce products on their behalf.
Author Paul Midler:
Poorly Made in China compiles stories from Midler's business dealings in China; the book focuses on a handful of case studies.
Inside its pages are the stories of the somewhat dysfunctional cat-and-mouse world of Chinese manufacturing for global export.
The writing here is excellent; Midler writes with a deadpan style while covering absolutely ridiculous occurrences that are seemingly par-for-the-course in doing business in a city like Guandong.
Here's one that made me chuckle:
He also does a fantastic job of explaining the nuances of Chinese culture that engender these SNAFUs, as well. I honestly did not imagine that reading a book about manufacturing in China could be so interesting and engaging! Top marks to the author here.
He wrote an excellent quote that I'll share here, which sheds a bit of light on the climate:
This one caught me by surprise. It was much better than I thought it would be.
I would definitely recommend it to anyone interested.
An easy 5-star rating.
Author Paul Midler is a middle-man of sorts. He lives in China and speaks fluent Mandarin. He acts as a go-between for his Western clients, and the factories of southern China who produce products on their behalf.
Author Paul Midler:
Poorly Made in China compiles stories from Midler's business dealings in China; the book focuses on a handful of case studies.
Inside its pages are the stories of the somewhat dysfunctional cat-and-mouse world of Chinese manufacturing for global export.
The writing here is excellent; Midler writes with a deadpan style while covering absolutely ridiculous occurrences that are seemingly par-for-the-course in doing business in a city like Guandong.
Here's one that made me chuckle:
"While living in South China, you would hear stories about quality gaffes from other importers. One story that went around involved a Turkish importer who had placed an order for shoes with one Chinese manufacturer. When the shoes arrived at their destination in Turkey, a nail was found driven in the bottom of each left shoe. The head of the nail stuck out of the sole about an inch. The importer had given the factory an original sample pair and had said that he wanted the shoes made “exactly like this.” The only problem was that there had been a nail in the bottom of the shoe from which it had hung on a display rack. The workers at the factory did not think it prudent to ask anyone about the nail. They figured, “that must be how they like their shoes in Turkey—with a nail driven into the bottom of the left one,” and so they filled the order just like that..."
He also does a fantastic job of explaining the nuances of Chinese culture that engender these SNAFUs, as well. I honestly did not imagine that reading a book about manufacturing in China could be so interesting and engaging! Top marks to the author here.
He wrote an excellent quote that I'll share here, which sheds a bit of light on the climate:
"Confucian ideology saw all human relationships as fitting within a natural hierarchy. Just as a father held a place above the son, the emperor was superior to his subjects. In China, the individuals involved in a relationship were not meant to be on equal footing, and in the manufacturing sector, there was a growing sense that in the natural order the factory was above and its customer somewhere below.
In ancient times, foreign emissaries traveled to China in order to pay tribute to the emperor. In return for their submission, the emperor left a visitor with gifts to carry home. King Chemical increasingly looked on Johnson Carter in a similar way. The money that the importer paid was like tribute offered, and gifts that we received in return came in the form of liquid soap and body wash.
The factory understood the notion of pleasing customers when they were just starting out, or when they were struggling along, but that was just feigned modesty, part of the stagecraft, a means of catching business. Once the manufacturer achieved a degree of success, it saw itself in the imperial role, while relegating the importer to that of a mere supplicant."
This one caught me by surprise. It was much better than I thought it would be.
I would definitely recommend it to anyone interested.
An easy 5-star rating.
November 26, 2012
Author Paul Midler, a non-Chinese U.S. native, learned Chinese as an undergrad and eventually got an MBA. Not wanting a stereotypical U.S. finance job, he became a middleman in southeast China's economic heartland -- a middleman between U.S. importers and Chinese manufacturers.
First, many American companies dealing with China are just that -- importers. Their companies never made a thing in America. They're start-up or near start-up entrepreneurs, aglow at the idea of selling cheap made-in-China stuff like health and beauty aids (and how dumb is it to ship 90 percent-water shampoo across the ocean) as house or generic brands to sell at places like Dollar General.
And, Chinese plants dealing with such importers seem to cheat in the manufacturing process every way they can, besides the obvious, exposed ones such as lead in paint and melamine in dog food. They simply refuse to pay for internal quality inspectors, then try to obstruct U.S. ones, people like the middleman author. They deliberately underbid in an intensely competitive market, then cut corners in any way they can.
Then, when they really get busted? Like the lead on Barbies last year? Did the Chinese manufacturer apologize to Mattel?
NO. Remember what happened? Eventually, Mattel apologized to the Chinese manufacturer for bringing its integrity, its Asian "face," into doubt.
And, that's another theme of the book. Asian "face" gets mingled, and mangled, with a developing Chinese aggressiveness, and you get more and more shenanigans like this.
Meanwhile, the importers, like the "other person" in a dysfunctional relationship, afraid that if they stand tough, a competitor will get a better deal, often quail, show inopportune emotion, or otherwise lose "face." If it happened to Mattel, contrary to a couple of reviewers here, it's happening a lot in China, don't doubt it.
Meanwhile, it appears, from this book and many other things, the Chinese Potemkin economy is a 3-legged stool: Beijing, local governors, and the manufacturers themselves. The manufacturers are often playing off Beijing and local governors, probably through a mix of threats, kickbacks, etc.
So, American importers have a mix of ongoing infatuation with China, fear of leaving if a competitor stays, fear of provoking a manufacturer if a competitor doesn't, and more. It's hugely dysfunctional.
First, many American companies dealing with China are just that -- importers. Their companies never made a thing in America. They're start-up or near start-up entrepreneurs, aglow at the idea of selling cheap made-in-China stuff like health and beauty aids (and how dumb is it to ship 90 percent-water shampoo across the ocean) as house or generic brands to sell at places like Dollar General.
And, Chinese plants dealing with such importers seem to cheat in the manufacturing process every way they can, besides the obvious, exposed ones such as lead in paint and melamine in dog food. They simply refuse to pay for internal quality inspectors, then try to obstruct U.S. ones, people like the middleman author. They deliberately underbid in an intensely competitive market, then cut corners in any way they can.
Then, when they really get busted? Like the lead on Barbies last year? Did the Chinese manufacturer apologize to Mattel?
NO. Remember what happened? Eventually, Mattel apologized to the Chinese manufacturer for bringing its integrity, its Asian "face," into doubt.
And, that's another theme of the book. Asian "face" gets mingled, and mangled, with a developing Chinese aggressiveness, and you get more and more shenanigans like this.
Meanwhile, the importers, like the "other person" in a dysfunctional relationship, afraid that if they stand tough, a competitor will get a better deal, often quail, show inopportune emotion, or otherwise lose "face." If it happened to Mattel, contrary to a couple of reviewers here, it's happening a lot in China, don't doubt it.
Meanwhile, it appears, from this book and many other things, the Chinese Potemkin economy is a 3-legged stool: Beijing, local governors, and the manufacturers themselves. The manufacturers are often playing off Beijing and local governors, probably through a mix of threats, kickbacks, etc.
So, American importers have a mix of ongoing infatuation with China, fear of leaving if a competitor stays, fear of provoking a manufacturer if a competitor doesn't, and more. It's hugely dysfunctional.
April 5, 2014
This book is great if you've lived in China just long enough to start to understand it and in turn hate it. Yes it’s about Chinese manufacturing but any lao wai will have common experiences even if they don't work in manufacturing or business or work at all. It’s got the culture of China, not the nuances, but things Chinese people do that add to the culture gap. This book had such a light tone about it too. It’s not telling you what to do or think its just telling you what happened. For once when reading a book about China it felt like it was written by somebody who’s actually lived in china. Paul Midler gives insight while still retaining the humanity and mundane normalcy in which these events take place. When reading books about China it’s often too clinical or too emotional. Too many books rely on fear of China to peak reader interest; they paint bleak dystopian futures, or other forms of dramatics removing the reader for reality making it hard to picture Chinese people as people. Instead the author depicts his business experiences with the same fondness and mystification of any old lao wai reminiscing. The kind of stories that have a fond "Oh, China" and cheers after. This, for me, is what makes this book a must read for any long term lao wai. This book simply states the frustrations and complaints foreigners feel but neither tells you to suck it up or give up. Kind of like a kind fatherly figure saying "That's life kid, here's what I did, here's some background information, now you figure it out."
5/5 would recommend this book to any frustrated lao wai who needs a good laugh and someone to relate to.
5/5 would recommend this book to any frustrated lao wai who needs a good laugh and someone to relate to.
June 9, 2025
This is kind of an odd book. The author has lived in China for many years and works as a translator/liaison/assistant to mostly American importers and Chinese manufacturers. Told more as a memoir, the book focuses on one specific client throughout the book and other incidents in different chapters. It’s pretty discouraging. The cultural differences are vast. Americans value honesty more than many cultures, along with reliability. Americans expect contracts to be fulfilled exactly. We have OSHA standards and so on.
The Chinese manufacturers have no problem with lying to your face (just look at mobile game ads) despite mountains of evidence. They don’t care about quality, only about cutting corners to save themselves a few bucks. They will screw their customers over; the customer is the bottom of the food chain. They don’t value innovation or ingenuity but do value imitation and copying. They tend to avoid direct communication. They manipulate prices to their advantage, often leaving the importer lucky to break even.
The sad thing is that even if things are made well and cheaply in the USA, too many customers assume that it’s not a good deal because it’s not made in China. Only when consumers demand quality over cheapness will anything change.
As the book was published some time ago, a lot of things have probably changed, but I bet a lot haven’t.
Language: Rare use of strong language
Sexual Content: None
Violence/Gore: Mild
Harm to Animals:
Harm to Children:
Other (Triggers):
The Chinese manufacturers have no problem with lying to your face (just look at mobile game ads) despite mountains of evidence. They don’t care about quality, only about cutting corners to save themselves a few bucks. They will screw their customers over; the customer is the bottom of the food chain. They don’t value innovation or ingenuity but do value imitation and copying. They tend to avoid direct communication. They manipulate prices to their advantage, often leaving the importer lucky to break even.
The sad thing is that even if things are made well and cheaply in the USA, too many customers assume that it’s not a good deal because it’s not made in China. Only when consumers demand quality over cheapness will anything change.
As the book was published some time ago, a lot of things have probably changed, but I bet a lot haven’t.
Language: Rare use of strong language
Sexual Content: None
Violence/Gore: Mild
Harm to Animals:
Harm to Children:
Other (Triggers):
May 24, 2021
What a fascinating read!
Book Summary
A manufacturer outlines the strategies of material production in China.
Because China is so far away, a lot of the cutting corners is to reduce weight, since the products need to be shipped overseas. Every saved kilogram is a kilogram more of products that can be packed into the shipping containers.
However, reducing the weight comes at a price. It reduces the quality, and safety for things that rely on structural integrity. Affecting things like safety equipment, machinery, and building materials (think escalators or elevators).
A good companion read for readers who also read Door to Door: The Magnificent, Maddening, Mysterious World of Transportation, Cradle to Cradle: Remaking the Way We Make Things, We Have Been Harmonized: Life in China's Surveillance State, and Made in China: A Prisoner, an SOS Letter, and the Hidden Cost of America's Cheap Goods.
4.6/5
Book Summary
A manufacturer outlines the strategies of material production in China.
Because China is so far away, a lot of the cutting corners is to reduce weight, since the products need to be shipped overseas. Every saved kilogram is a kilogram more of products that can be packed into the shipping containers.
However, reducing the weight comes at a price. It reduces the quality, and safety for things that rely on structural integrity. Affecting things like safety equipment, machinery, and building materials (think escalators or elevators).
A good companion read for readers who also read Door to Door: The Magnificent, Maddening, Mysterious World of Transportation, Cradle to Cradle: Remaking the Way We Make Things, We Have Been Harmonized: Life in China's Surveillance State, and Made in China: A Prisoner, an SOS Letter, and the Hidden Cost of America's Cheap Goods.
4.6/5
November 11, 2018
Chystáte se podnikat v Číně anebo o tom třeba jen přemýšlíte, byť malinko? Tak si přečtěte tuto knihu. Je sice staršího dat a věřím, že hodně věcí se už změnilo k lepšímu (alespoň sama sebe přesvědčuji o tom, že to opravdu není až tak zlé), každopádně pointa zůstává stejná. Je o kultuře byznysu v Číně, o tom jak přemýšlejí, jakým způsobem jednají a jak řeší problémy v nejlidnatější zemi na světě.
January 5, 2020
“You foreigners, you come to China and complain about the pollution, but I don’t know why. To me, this place smells like money.”
An entertaining book outlining some of the business logic employed when working with Chinese manufacturers. This book, with funny quips from businessmen, coupled with finishing s4 of the Sopranos, makes one realise that it takes a lot more than a degree or executing rules well to run a successful business.
Takeaways about manufacturing relationships:
- Chinese manufacturers produce high quality goods at cost price from the start, then start substituting ingredients over time; importers don’t notice anything until it’s too late
- Manufacturers also know they can make more money in the long term by profiting off supplier relationships, reputation — they play chess, not checkers (strategic, not linear)
- You would expect relationships with Chinese manufacturers to improve over time as they got more prosperous, but relationships actually deteriorated because they got more leverage over you
- Manufacturers de-risk by passing on the blame to importers. Mattel apologised to the Chinese government for the lead paint fiasco when it was the Chinese manufacturer’s fault for the contamination
- Classic business tactics (eg price discrimination, volume discounts) do not work with Chinese manufacturers, and they can guess your pricing strategies based on the expression on your face even if you don’t speak the same language. Don’t get an MBA — move to China! But what works in China does not probably work elsewhere in the world
Business takeaways:
- What factories do to maintain control: no more than 25% of a factory’s workers come from a single province. When too many come from the same place, groups were more willing to conspire
- Hire more workers than necessary — so employees try harder to prove their worth
- “If you give these people an inch, they’ll take a mile”
- When the importer screwed the supplier back by stuffing the warehouse with excess inventory
Perils of joint ventures:
- When people knew the joint venture deal stank because of unequal terms, but signing a JV would help the American company get their year end bonus and the good optics of “China is the future”
- Americans also don’t want to lose face with their counterparts so they act like their business in China doing well when they’re barely breaking even
- The joke on JVs in China is that you lose 50% of your capital in your first year and the other 50% in your second
Other insights on China:
- “China’s government was totalitarian and overbearing, and yet the media also reported that the Chinese people were amongst the most contented in the world. Had the Communist Party succeeded in building a “harmonious society”, or were its citizens suffering from a mass-scale Stockholm Syndrome?” Which was an interesting topic for me because my Chinese friend and I had discussed that both the Chinese and Japanese people were overworked, but somehow it seemed that the Chinese took it in their stride a lot better. But is this also a matter of media reporting?
An entertaining book outlining some of the business logic employed when working with Chinese manufacturers. This book, with funny quips from businessmen, coupled with finishing s4 of the Sopranos, makes one realise that it takes a lot more than a degree or executing rules well to run a successful business.
Takeaways about manufacturing relationships:
- Chinese manufacturers produce high quality goods at cost price from the start, then start substituting ingredients over time; importers don’t notice anything until it’s too late
- Manufacturers also know they can make more money in the long term by profiting off supplier relationships, reputation — they play chess, not checkers (strategic, not linear)
- You would expect relationships with Chinese manufacturers to improve over time as they got more prosperous, but relationships actually deteriorated because they got more leverage over you
- Manufacturers de-risk by passing on the blame to importers. Mattel apologised to the Chinese government for the lead paint fiasco when it was the Chinese manufacturer’s fault for the contamination
- Classic business tactics (eg price discrimination, volume discounts) do not work with Chinese manufacturers, and they can guess your pricing strategies based on the expression on your face even if you don’t speak the same language. Don’t get an MBA — move to China! But what works in China does not probably work elsewhere in the world
Business takeaways:
- What factories do to maintain control: no more than 25% of a factory’s workers come from a single province. When too many come from the same place, groups were more willing to conspire
- Hire more workers than necessary — so employees try harder to prove their worth
- “If you give these people an inch, they’ll take a mile”
- When the importer screwed the supplier back by stuffing the warehouse with excess inventory
Perils of joint ventures:
- When people knew the joint venture deal stank because of unequal terms, but signing a JV would help the American company get their year end bonus and the good optics of “China is the future”
- Americans also don’t want to lose face with their counterparts so they act like their business in China doing well when they’re barely breaking even
- The joke on JVs in China is that you lose 50% of your capital in your first year and the other 50% in your second
Other insights on China:
- “China’s government was totalitarian and overbearing, and yet the media also reported that the Chinese people were amongst the most contented in the world. Had the Communist Party succeeded in building a “harmonious society”, or were its citizens suffering from a mass-scale Stockholm Syndrome?” Which was an interesting topic for me because my Chinese friend and I had discussed that both the Chinese and Japanese people were overworked, but somehow it seemed that the Chinese took it in their stride a lot better. But is this also a matter of media reporting?
March 7, 2019
Manufacturing and import is a topic that doesn’t sound exciting. When it’s told through the lens of a culturally sensitive, deadpan narrator it became a really engaging story.
July 31, 2017
This book reinforces what I have heard from various people and places about doing business in China. There are many opportunities there but it is by no means easy money for the naive. You have to be conscious to the ways of doing business in China and you have to keep in mind that customer is often not king there. You get exactly what you ask for (at least in your very first order). The European/American direct approach to problem solving also doesn’t work there, in some aspects it’s similar to India and Philippines where I have personal experience from.
“They believed that the customer's exact wishes mattered only as far as they were necessary to capture the initial order. Beyond that, they figured, what an importer didn't know couldn't hurt it.”
“Appearance over substance was a cultural theme in China” (starting to reverse-engineer and copy from the outside in, sometimes they only needed to have the package prototype to get the order after which they started to figure out the rest).
“Supplier relationships were almost never better than they were at the very beginning. Manufacturers intentionally degraded the quality of their product, and at the same time, they found small ways in which to ratchet up prices in the short term.”
“Some said that the answer to China's quality challenge was to test more of its products. The problem with this solution—at least in health and beauty care—was that it was too expensive. For many product categories, Johnson Carter earned not even 10¢ per bottle. If there were 20,000 pieces in a 40-foot container, the importer might earn only $2,000 in profit, and then the laboratory wanted to charge more than $200 for each separate test that it might run. Testing just one bottle for the presence of five different toxic substances could run more than a thousand dollars.”
“Maybe it was just my changed perspective from having lived in China for so long, but it seemed that Chinese companies were more aggressive in engaging the broader world. In the United States, the growing trend was to ignore a rival when a better strategy might have been to take the threat of competition as a welcome challenge. There was something about China's economic rise in any event that was causing American companies to lose confidence.”
“They believed that the customer's exact wishes mattered only as far as they were necessary to capture the initial order. Beyond that, they figured, what an importer didn't know couldn't hurt it.”
“Appearance over substance was a cultural theme in China” (starting to reverse-engineer and copy from the outside in, sometimes they only needed to have the package prototype to get the order after which they started to figure out the rest).
“Supplier relationships were almost never better than they were at the very beginning. Manufacturers intentionally degraded the quality of their product, and at the same time, they found small ways in which to ratchet up prices in the short term.”
“Some said that the answer to China's quality challenge was to test more of its products. The problem with this solution—at least in health and beauty care—was that it was too expensive. For many product categories, Johnson Carter earned not even 10¢ per bottle. If there were 20,000 pieces in a 40-foot container, the importer might earn only $2,000 in profit, and then the laboratory wanted to charge more than $200 for each separate test that it might run. Testing just one bottle for the presence of five different toxic substances could run more than a thousand dollars.”
“Maybe it was just my changed perspective from having lived in China for so long, but it seemed that Chinese companies were more aggressive in engaging the broader world. In the United States, the growing trend was to ignore a rival when a better strategy might have been to take the threat of competition as a welcome challenge. There was something about China's economic rise in any event that was causing American companies to lose confidence.”
March 12, 2017
Tohle se čte jak detektivka nebo spíš dost drastický thriller - pro Evropana naprosto nepředstavitelné. Samozřejmě člověk ví, že s výrobou v Číně jsou problémy, slýchám to opakovaně i od našich zákazníků, ale že je to až tak velký průšvih, mi opravdu nedošlo. Pojetí vztahu se zákazníkem je naprosto dechberoucí, schopnost ošidit všechno a všechny nemá nikdy konce.
Díky této knize jsem si uvědomila, že pro spoustu firem za outsourcingem do Číny není snaha víc vydělat, ale boj o holé přežití a do téhle pozice je dostáváme my jako zákazníci. Už léta sice koukám co a od koho nakupujeme, selektuji výrobce atd. - když to jen trochu jde, tak preferuji české nebo alespoň evropské výrobce a výrobky reálně vyrobené na kontinentu, ale subdodavatele nemá člověk šanci obsáhnout a u řady věcí skutečné místo výroby ani dohledat nelze. Občas je to únavné, kolikrát se na to dočasně vykašlu, ale po přečtení téhle knihy mě to tedy určitě nějakou dobu zase bude pořádně držet.
Naprostý MUST READ pro veškeré spotřebitele (tudíž pro všechny) z vyspělých států. Pro ty, kdo hodlají obchodovat v Číně, pak ještě víc. Výjimečná kniha, která se čte jedním dechem, nabízí řadu věcí k přemýšlení a ukazuje Čínu v dost odlišném úhlu pohledu než jak jsme zvyklí. Plný počet hvězdiček a už v březnu jeden z kandidátů na letošní knihu roku.
Kontext: Asi po roce se mi podařilo knížku v knihovně sehnat - pořád byla rozpůjčovaná a jak to mám do knihovny 30 km (bližší knihovny jsou nepoužitelné), tak rezervace nedělám, zvlášť kvůli jedné knížce se mi takovou dálku lítat nechce.
První věta: "V Číně se vyrábí všechno na světě a spolu s tím všechny možné pachy."
Poslední věta: "V zemi, kde se nakladatelé bojí publikovat, kde se lidé bojí mluvit, nemůže dojít ke skutečnému pokroku."
Díky této knize jsem si uvědomila, že pro spoustu firem za outsourcingem do Číny není snaha víc vydělat, ale boj o holé přežití a do téhle pozice je dostáváme my jako zákazníci. Už léta sice koukám co a od koho nakupujeme, selektuji výrobce atd. - když to jen trochu jde, tak preferuji české nebo alespoň evropské výrobce a výrobky reálně vyrobené na kontinentu, ale subdodavatele nemá člověk šanci obsáhnout a u řady věcí skutečné místo výroby ani dohledat nelze. Občas je to únavné, kolikrát se na to dočasně vykašlu, ale po přečtení téhle knihy mě to tedy určitě nějakou dobu zase bude pořádně držet.
Naprostý MUST READ pro veškeré spotřebitele (tudíž pro všechny) z vyspělých států. Pro ty, kdo hodlají obchodovat v Číně, pak ještě víc. Výjimečná kniha, která se čte jedním dechem, nabízí řadu věcí k přemýšlení a ukazuje Čínu v dost odlišném úhlu pohledu než jak jsme zvyklí. Plný počet hvězdiček a už v březnu jeden z kandidátů na letošní knihu roku.
Kontext: Asi po roce se mi podařilo knížku v knihovně sehnat - pořád byla rozpůjčovaná a jak to mám do knihovny 30 km (bližší knihovny jsou nepoužitelné), tak rezervace nedělám, zvlášť kvůli jedné knížce se mi takovou dálku lítat nechce.
První věta: "V Číně se vyrábí všechno na světě a spolu s tím všechny možné pachy."
Poslední věta: "V zemi, kde se nakladatelé bojí publikovat, kde se lidé bojí mluvit, nemůže dojít ke skutečnému pokroku."
August 11, 2012
I am working with Chinese companies for over 7 years in China. I agree with many points of the author Paul Midler but he is missing some important points and here is a key message:
Mattel's toxic toys scandal
I have seen customers who don't bother about quality certificates.
Push prices to the limit and leave controls away. The supplier who worked with Mattel at this time was Lee Der Industrial. I was lucky enough to meet one of their employees on a train back to Hong Kong.
Zhang Shuhong (Chinese: 张树鸿, 1957 - August 11, 2007) was the factory owner of Lee Der Industrial. Zhang committed suicide after toys made at his factory for Fisher-Price (a division of Mattel) were found to contain lead paint. Employee's quote "Mattel only pushed prices and never wanted to see the certificates".
How does this look like now?
(a) Bad Chinese supplier who wants to make profits and does not care about children's health?
(b) Mattel is a greedy company which knew the problems in China very well (sourcing their for decades) but wanted to make a bigger profit and does not care about the health of children.
I leave it up to you. The experience that I have made in all these years is showing the reality. For me it is a game of profits and I work in business long enough to understand that it is easier to kill a supplier in China than loosing a billion dollar business.
I am from Germany!
Mattel's toxic toys scandal
I have seen customers who don't bother about quality certificates.
Push prices to the limit and leave controls away. The supplier who worked with Mattel at this time was Lee Der Industrial. I was lucky enough to meet one of their employees on a train back to Hong Kong.
Zhang Shuhong (Chinese: 张树鸿, 1957 - August 11, 2007) was the factory owner of Lee Der Industrial. Zhang committed suicide after toys made at his factory for Fisher-Price (a division of Mattel) were found to contain lead paint. Employee's quote "Mattel only pushed prices and never wanted to see the certificates".
How does this look like now?
(a) Bad Chinese supplier who wants to make profits and does not care about children's health?
(b) Mattel is a greedy company which knew the problems in China very well (sourcing their for decades) but wanted to make a bigger profit and does not care about the health of children.
I leave it up to you. The experience that I have made in all these years is showing the reality. For me it is a game of profits and I work in business long enough to understand that it is easier to kill a supplier in China than loosing a billion dollar business.
I am from Germany!
July 10, 2013
A shocking look into the Chinese manufacturing phenomenon. The stories described within shed light on the peculiarities of the Chinese character and culture, and at the same time reveal the true ugliness beneath: practically nonexistent business ethics.
The author lives and works in China--as an agent for the US importers; he mediates the entire process of setting up a business and intervenes whenever shit hits the fan, which seems to happen quite often. The book exposes many dirty strategies the manufacturers use, all described through author's own war stories. The deal usually starts by attracting business through terms too good to be true and setting up a facade of professionalism, high quality and cleanliness; then, after everything is set up, the manufacturer starts cutting corners. The author describes it as a "quality fade" and gives numerous examples of how manufacturers switched ingredients and changed specs on their own, without ever mentioning it, and at the same time tried to use any excuse possible to raise prices. And once the entire process is set up, switching costs are too prohibitive to change manufacturers; manufacturers are of course happy to use this fact to their advantage.
All in all, this book gives many interesting observations and analogies and makes you wonder what exactly your average everyday use product has been through.
The author lives and works in China--as an agent for the US importers; he mediates the entire process of setting up a business and intervenes whenever shit hits the fan, which seems to happen quite often. The book exposes many dirty strategies the manufacturers use, all described through author's own war stories. The deal usually starts by attracting business through terms too good to be true and setting up a facade of professionalism, high quality and cleanliness; then, after everything is set up, the manufacturer starts cutting corners. The author describes it as a "quality fade" and gives numerous examples of how manufacturers switched ingredients and changed specs on their own, without ever mentioning it, and at the same time tried to use any excuse possible to raise prices. And once the entire process is set up, switching costs are too prohibitive to change manufacturers; manufacturers are of course happy to use this fact to their advantage.
All in all, this book gives many interesting observations and analogies and makes you wonder what exactly your average everyday use product has been through.
June 29, 2015
U nás vyšlo pod názvem Made in China. Z mé vlastní zkušenosti velmi dobrý průvodce světem výrobních a dodavatelských vztahů v Číně, psáno s nadhledem, zaujetím pro detail a humorem. Doporučuju i jako příjemné oddychové čtení. Asi to nejlepší, co jsem v oboru četl a co vychází z praxe, takže pokud nechcete suché seznamy toho, jak má probíhat kontraktáž v čínské fabrice, tady se dozvíte to, co byste se v Číně dozvěděli záhy po příjezdu: kontraktáž nikdy neprobíhá podle seznamu, rozhodně ne podle toho vašeho :)
August 28, 2016
Đọc quyển này xong lại nhớ ngày xưa ngô nghê từng hỏi một thằng TQ là sao chúng mày toàn sản xuất hàng kém chất lượng thế. Nó thản nhiên bảo tiền nào của nấy cả. Giống như Tỉ phang vào mặt ông già Bernie: Với giá các ông đang trả, các ông mong đợi cái gì? :))
September 23, 2018
Ever since the breakneck pace of China’s economic development from the 1980s, only the word ‘miracle’ seems to capture what China has accomplished in the past forty years. GDP was galloping at 10-12% per annum and poverty was declining rapidly. New cities and massive projects like highways and high-speed rail are coming up at an unprecedented pace. As if all this is not enough, they produce goods for the world at prices which are at such low levels that even other developing nations like India and Phillippines wonder ‘how do they do it?’. This book is a brilliant contribution to the mystery of ‘how do they make goods so cheaply’. The author is a Wharton school MBA, who has lived in China since 2001 and considers China his home and speaks Mandarin. He has worked extensively in facilitating US importers engage with Chinese manufacturers in setting up and running their export businesses. In this book, he outlines his experiences and conclusions in helping American importers of various kinds - discount soap/shampoo/beauty product sellers, diamond merchants and waste paper recycling companies in New York. It is a fascinating study based on years of practical work on the ground in South China. The value of his observations come not only from the experience on the ground but from the ability of the author in putting the lessons in perspective in the context of Chinese culture, history and social mores.
According to the author, the key to understanding the ‘China Price’ is the dubious concept of ‘quality fade’, practised by Chinese factories. ‘Quality fade’ is the calculated and hidden practice of expanding profit margins through a reduction in the quality of materials that go into making a product. It is not easily visible to the importers because changes are subtle and gradual and in areas where the importer would check the least. The first round of product samples keep to the specs, but there is quality fade with each subsequent production run, because a bit more of the necessary inputs are missing, resulting in profit for the Chinese manufacturer. This process continues as the manufacturers keep pushing the limit by compromising the product more and more until they are caught, or until disaster strikes.
One would think that the importer would fight the manufacturer then by asking for replacement of the faulty products or by finding an alternate supplier or taking them to court. But that is not what happens. At times, the importer hopes that the end customer may not notice the problems and lets the product pass because he does not want to miss the promised delivery date. If he demands replacement of the product, the supplier ups the ante by threatening to terminate the relationship, knowing fully well that it takes months or even longer to move production to another manufacturer. Even if that happens, it is most likely that the new supplier would do the same wilful thing because this is how they make money in the export business. The third option of going to the courts is non-existent as it is virtually impossible to take legal action in China against a local manufacturer. Manufacturing in China is a game without referees. You cannot go to the govt to complain. However, when the product is recalled in the U.S due to its shortcomings, it is the importer who pays the cost of that recall. Consequently, the Chinese manufacturer has little reputational cost for his shenanigans while the importer has far less leverage than we imagine. So, we have the situation of the importer dealing with quality problems through third-party testers on the ground in China. It is far from fail-safe because many times testing costs much more than the products and the manufacturers have many ways of outwitting the testers and getting their products ‘passed’. Other importers play the game of trying to gain leverage over the manufacturer and rescue ‘quality’ from being held hostage by the supplier. But, this is a cat and mouse game and soon the supplier nullifies the leverage and starts the game all over again.
It is evident that American importers tolerate so much more malpractice from their Chinese suppliers compared to what they would with a fellow-American supplier. For example, the supplier often increases the price once a big deal is fully signed. Certainly, greed on the part of the importer, the retailer and the global consumers to pay as little as possible is one reason why we all put up with such unethical practices. In some ways, it is inherent in the Globalization model. Even if an importer does not want to do manufacturing in China, he is forced to go there once one of his competitors goes there and floods the market with lower-priced products. So, in every market, company after company manufactures in China because of the pressure of some of their competitors who are already there. In the end, all of them end up enabling the game of gradual quality fade in every one of their products. This is how we have all come to accept inferior products at low prices in the past thirty years.
If ‘Quality fade’ and other bad ethics are integral to the Chinese way of doing export business, the question then arises as to how they accomplish all these giagantic projects like highways, railroads and bridges and tunnels of good quality. We don’t hear constantly of bridges and highways collapsing or trains being derailed or Chinese fighter jets disintegrating in the air. It is possible that they don’t cut corners when the customer is the all-powerful Chinese State, but do so when the customers are foreigners or the powerless, ordinary Chinese citizens. If this is true, what would happen when China loses the immense price advantage due to rising wages? Chinese goods would then be no longer attractive in foreign markets. Would China’s economy be able to wean itself away from its dependency on exports before the price arbitrage vanishes? We always hear China scholars in the West talking of the ‘long term vision’ of the Chinese people and its leadership in their plans. It doesn’t square with such a myopic view of advancing business by cutting corners and cheating customers and viewing business as a ‘cat and mouse’ game instead of a co-operative engagement in the interests of both the parties. A nation that has superpower ambitions to displace the US cannot do it with such a small-minded, penny-pinching mindset.
The author’s discussion on the Chinese approach to business throws light on some of China’s conduct in contentious international disputes. The practice of gaining material advantage by nibbling away at the edges - like making the plastic bottles thinner or using cheaper and inferior ingredients in the formula for making the product or using ‘3 meters (9.84 ft) as equivalent to 10 feet’ - is something that can be observed in the Chinese behavior even in the context of geo-politics. In the South China sea dispute, China seized a few small islands from Vietnam’s control in the 1970s, then encroached in the Mischief Reef (Philippines) by building bunkers in 1995 and then occupied Scarborough Shoal in 2012. A similar pattern can be seen in their dispute with Japan over the Senkaku islands. China has slowly and steadily been violating the islands’ boundaries by sending both military and fishing ships into the Senkaku waters. The Chinese also set up an Air Defence Identification Zone (ADIZ) in an area which encompasses the Senkaku Islands. China has also constructed gas drilling rigs near the contiguous zone median line. In their border dispute with India also, the same pattern is visible over the past 60 years. A year ago, the PLA entered the Doklam plateau which lies in the triangle between India, Bhutan and Tibet. Bhutan claims that Doklam belongs to it but China wants to occupy it so that it can threaten India’s narrow access to its North-east. They were not successful in their mission in 2017, but it does not mean that they won’t try at a more opportune time again. One can see the pattern here similar to their forays in Senkaku and South China sea.
In the long history of China, they were known for four great inventions namely, paper, printing, gun powder and the compass. Somewhere, this inventive spirit seems to have hit a brick wall. Instead, today’s China is very good at reverse engineering a product made outside and manufacturing it locally at much cheaper prices and selling it in other markets with total disregard for the Intellectual Property Rights. All their great success stories of today, like Alibaba, We Chat, Huawei, Tencent etc are all companies which have duplicated the innovations of Amazon, WhatsApp, Cisco and Facebook for their local markets by keeping out foreign competition. We hear in the US media about China taking over AI and Quantum Computing in future by their innovations in Science and Technology. One wonders how a closed mindset of unethical business practices, a copying disposition with blatant disregard for rules, chipping away at the fringe to gain incremental advantage, disregard for facts and a false sense of history can help inspire innovation. Don’t we need free exchange of ideas and a freedom to question accepted orthodoxy in society to spur innovation and inventions? Today’s advances in Artificial Intelligence are based on immense volume of data and a comparatively very small amount of intelligence in the algorithms. Certainly, China has an advantage in gathering data due to the State’s use of technology in monitoring its 1.4 billion citizens. This frenzy of AI, based on more and more data will run its course and hit a roadblock which can be overcome only through genuine breakthroughs in decoding how humans solve problems. Will China be able to find answers here? Only time can tell.
Americans have a tendency to cry ‘wolf’ periodically. Books of the early 1970s warned that ‘the Russians are going to overtake us’. In the 1980s, it was the ‘Japanese challenge’ in both industry and innovation. Now, it is the Chinese challenge in Science, Technology and Global power. The first two did not materialise. We cannot be smug about the third one but at the same time, there is no need to overstate the case and panic and lose sight of our intrinsic strengths. I used to be in awe of the ‘Chinese Miracle’, but Midler’s book suggests that the miracle’s core is rather hollow and lacks the character necessary to fundamentally change the world. In the end, as I learnt in Computer software development, the best way to do anything is to do it the right way from the beginning, without cutting corners or taking short cuts and always keeping faithful to all the specifications. Western societies are ahead on this and that should amount to something.
July 14, 2022
jing hao handed me this book while i was at his place and said i should read it. so i did
a light read that shines a fair bit of light on how cultural mismatches between the west and china + deeply ingrained cultural ideas lead to quality breakdowns and importer-supplier struggles. also almost Aesopian in the tales of cunning and savvy delivered - solidified my view that if i ever got into business i'd be a bankrupt within weeks
a light read that shines a fair bit of light on how cultural mismatches between the west and china + deeply ingrained cultural ideas lead to quality breakdowns and importer-supplier struggles. also almost Aesopian in the tales of cunning and savvy delivered - solidified my view that if i ever got into business i'd be a bankrupt within weeks
February 1, 2023
Made in China hat überwiegend keinen guten Ruf. Doch warum ist das so? Wie funktionieren chinesische Produktionen? Der Autor nimmt uns mit in eine Produktionsstätte und erzählt uns anhand der Interaktion, was das kulturelle Miteinander für Auswirkungen auf das Geschäftsleben hat? Wie sind die Sicherheitsbedingungen, hygienischen Zustände, wie läuft der Produkt-Entwicklungsprozess ab? Was ist mit Fake Produkten? Und wie läuft der Verhandlungsprozess zwischen ausländischen Auftraggeber und der chinesischen Produktionsstätte ab. In diesem Buch bekommt man einen sehr kleinen Einblick in die Herausforderungen und warum sich immer wieder absurde Produktskandale ergeben.
December 9, 2014
To satisfy the insatiable appetite for plastic crap at bargain prices, it’s no secret that the world’s multinationals look to China to mass produce their trinkets for minimum cost. With a cheap and infinitely replaceable labour supply, minimum government intervention and the ability to skirt environmental responsibilities, what appears to be a capitalist’s wet dream degenerates into a Faustian bargain whereby the Western rules of contract law, product quality and safety standards don’t apply. A 15 year expatriate living in China, Midler describes the cultural predilection for obfuscation and chicanery underpinning many of their business dealings. In a climate of zero-sum ethics and absent moral scruples, the lesson that emerges for many importers is written in Latin - "Caveat Emptor". 5/5
Fave Quotes- "You foreigners,” he said. “You come to China and complain about the pollution, but I don’t know why.” He then gestured at the blurred landscape around us. “To me, this place smells like money.”
“Chinese factories often engaged in quality fade—the incremental degradation of a product over time. They quietly reduced the amount of materials or else manipulate the quality of raw inputs. The changes were gradual, almost imperceptible. The importer was neither asked for permission nor told.”
“Importers were thinking checkers, while manufacturers were playing chess.”
Fave Quotes- "You foreigners,” he said. “You come to China and complain about the pollution, but I don’t know why.” He then gestured at the blurred landscape around us. “To me, this place smells like money.”
“Chinese factories often engaged in quality fade—the incremental degradation of a product over time. They quietly reduced the amount of materials or else manipulate the quality of raw inputs. The changes were gradual, almost imperceptible. The importer was neither asked for permission nor told.”
“Importers were thinking checkers, while manufacturers were playing chess.”
December 21, 2013
This book is well-written and full of practical experiences of the author. The real life stories of the author are what made this book appealing and helpful. Although I have some experience living in China for a while, this book opens a totally whole new horizon for me about the reality behind all the cheap product 'made in china'. When I was in China, I and my friends were always surprised by the cheap prices of clothes, toys, shampoos.. you name it! To be honest, it was good to be able to buy technically anything with a budget as low as US$15, but on the other hand the quality is never guaranteed. At least with this book now the mystery of low price and fake brands in China is partially uncovered.
With no cost on R&D, replacing materials regardless of consequences, using cheap labors, and using very unsustainable pricing strategies, Chinese manufacturers could manage to export millions of products around the world, at the same time earn million $ themselves. But at the end, I share the concern with the author about the sustainability of this model. At least so far, as many of us know, the brand 'made in China' is not a favored title any more - and in many cases it is associated with cheap, low quality and even dangerous.
With no cost on R&D, replacing materials regardless of consequences, using cheap labors, and using very unsustainable pricing strategies, Chinese manufacturers could manage to export millions of products around the world, at the same time earn million $ themselves. But at the end, I share the concern with the author about the sustainability of this model. At least so far, as many of us know, the brand 'made in China' is not a favored title any more - and in many cases it is associated with cheap, low quality and even dangerous.
November 30, 2019
This book takes the reader into the world of trade tricks of Chinese manufacturers. Occasionally, the author veers into the Chinese culture and idiosyncratic politics, but its mainly about the tricky relationship between Chinese manufacturers and the trading partners or importers. The author was an advisor or consultant to some Western importers, and this book is his experience playing that role. The lack of regulation and quality control in Chinese factories would leave you aghast. To Chinese manufacturers, willingness and ability to cheat their importing partners and manipulating quality measures is almost a national trade policy.
Warning⚠️: Chinese manufacturers can f*ck you up and not feel an iota of shame or anything.
Warning⚠️: Chinese manufacturers can f*ck you up and not feel an iota of shame or anything.
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