Oh dear, and they were doing so well!!
The news this last week of goods made in China being recalled for safety considerations in both the UK and the USA highlights either an unfortunate (and unacceptable) lapse of common sense by the manufacturing community in China or an unsavoury (and equally unacceptable) attempt to darken China's name for political expediency.
"Charitably" I tend to the former view because I think the repercussions of a politically induced trade war will be further reaching than any "invisible hands" might imagine.
What worries me about the substandard goods is the danger of a return to the era of the 1950s and 1960s where, to quote one well written website "Throughout the West, the labels “Made in Hong Kong” or “Empire Made” (often the same thing), became bywords for cheap and shoddy goods."
I don't want to point fingers, as I don't have precise knowledge today, but I am aware that some Hong Kong manufacturers certainly used to make toys for the US market, and for the names mentioned. Hopefully this is an aberration and will be resolved soon - with China getting back to concentrating on quality, quality and quality. Believe me, there are still manufacturers alive and well in South East Asia who will be just waiting to pick up orders if the US and European buyers decide it is time to hedge their order books and, despite a slight increase in costs, be sure of their quality.
What I don't understand is why a company like Mattel, which orders many goods from China, doesn't have its own safety and quality inspectors on site - or if they do, what went wrong?
Mattel has acted quickly and, hopefully, without any follow-on repercussions but they cannot afford another lapse. Neither can China.
The implications for FDI flows into China have to be considered carefully - poor quality factories/manufacturers will not attract investment dollars.
Message for investors and buyers - know whom you are dealing with and seek out the best advice.
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