For many, ‘Made in China’ is the same as cheap and lousy. It’s become a stereotype. However, this was not always the case.
In the past, people viewed Chinese products positively. Products like tea and furniture were considered unique. It was high-quality and offered cultural value. But when China started to mass-produce for so many companies, it slowly transitioned into becoming a world factory. With this, the impression of their products changed quickly.
China was associated with bad quality. And this was due to the experiences people had with Chinese manufacturers. Most of them had no experience even running a business. They believed that higher revenues at a low cost were more important. They were willing to produce poor quality products in order to keep the cost at a minimum. It was the absence of quality control. With this, issues emerged – one example is the milk scandal that occurred in 2008 in China.
The 2008 milk scandal put the health of 300,000 individuals at risk. 54,000 babies were hospitalized and six infants died. This tragedy was then viewed more negatively, because the government tried to cover it up by beating the informer to death. You can imagine the poor publicity that followed. Hence, the impression that everything ‘made in China’ was poorly made.
Made in China: The Changing Stereotype
Although Chinese products carried the negative stigma for a long time, this stereotype is changing fast. China has come a long way. This is thanks to the improvement in working conditions. Wages are starting to increase, and employment laws are starting to be revised and reenacted. Overall, Chinese manufacturing has progressed. It is transforming from the typical stereotype of low quality into an effective, high-quality manufacturing alternative.
‘Made in China’ is no longer seen as cheap. Trustworthy Chinese brands have emerged, and some have caught up with established foreign rivals. There are a few that have actually surpassed them. Recent reports show that there are now seven Chinese smartphone products included in the top ten brands worldwide. Huawei ranks number two in Europe and third in the world. This shift is said to be because of three main factors.
3 reasons why China is no longer viewed as cheap
- Chinese brands have improved the quality of their products
Chinese manufacturers have found their position in the market – low cost products. With this, they are making cutting edge and superior items accessible. And consumers around the world have adjusted their views along with it.
- China is transforming from being a ‘World Factory’ to a ‘World Market’
China is also speeding up its economic transition by aiming for an increase in foreign investment. This is all part of its effort to transform itself from a ‘world factory’ into a ‘world market’.
There are already many foreign investors who are trying to venture into the Chinese market. In 2016, direct investment in China rose 6.4 percent. The international status of the Chinese market is rising – attracting big name brands like Toys ‘R’ Us. Toys ‘R’ Us just opened their 100th store in China, and intend to open another 30–40 stores this year.
In the past, foreign investments concentrated on manufacturing and exports. Investors previously made use of China’s inexpensive labor and low-cost production aspects. China is now going through economic transition. Domestic consumption has become an important driving force for its economy. As a whole China is evolving.
- The development of a Made in China 2025 plan
The State Council of China has crafted a Made in China 2025 plan. It’s a 10-year plan that aims to upgrade the Chinese manufacturing industry. And help China become a global leader in manufacturing higher-value, quality products. The initiative places emphasise on quality over quantity, achieving green development and nurturing human talent.
It’s clear that we no longer fear the ‘made in China’ label. And that cheap doesn’t always translate to nasty. Believe it or not you can cut costs without cutting corners! If you’re interested in learning more about finding the right overseas supplier for your business, have a chat with one of our sourcing experts today. Send us a message!
Giovanni’s passion and interest in global sourcing and trade gives him insight and understanding that most would miss. His love of research mixed with his background in business makes for an interesting read.