Made in China – poorly?

Since I was a child, most of the things that we owned at our house was made in some Asian country: Singapore, Taiwan, South Korea, but most, obviously, from China. People laugh to this day that Chinese products are rubbish, poorly made or designed. Yet everyone buys them whether they know about it or not. That made me think a bit more about this phenomenon.

made_in_china

Now, why would anyone buy those products even occasionally if they were of such poor quality, not to mention own most of his belongings made there? Because, based on their price, they are not poorly made. Since Asian markets are among the lowest taxed regions in the world with no minimal wages, lack of regulations and benefits systems – the incentives to work efficiently are the biggest. Therefore, people in Asia work very hard, but, most importantly, they work smart investing in new technologies and production patterns that make them competitive against gigantic competition from inconceivable for Westerners amounts of companies compared to dying, over-regulated, over-taxed Europe and, to a smaller extent, USA and the whole of North America.

Now, when I talk about the price to quality ratio I don’t mean just the cheapest products imaginable. Throughout the years, since the successful stopping of cultural revolution in China that would destroy it the same way Europe and the States were destroyed beginning in the first half of 20th century (led by socialist Nazis from Germany and communist Soviets from Russia), China and a few of other Asian countries grew bigger and stronger thanks to capitalism and largely free market economy. From making paper notebooks, pencils, then calculators, computer chips and now cars, ships and rockets. For the most part they are simply unchallenged. We have occasional sparks of ingenuity and companies like Tesla Motors or Google, but they are all based on the development of Asian industry, without which the world would look nothing like it does today. Most of the chips, gizmos and even Western factories’ equipment are still made in China, but even more curiously the products that consist of these products are assembled and are sold from there as well due to enormous taxes and regulations in the Western World.

Propaganda vs Reality
You can always buy a poorly made product if You don’t pay attention to reviews or plainly how You spend Your money. However, among the products, whatever the desired quality, the Asian creations are for the most part the best value, whether it’s low or high-end. At least I can see improvement throughout the years of people’s attitude towards these products. Whatever the “experts” in media wrote (or not, by purposefully avoiding these products) about some products when the manufacturer came into worldwide existence, most of them got around to “Chinese” products with time or the next generation of reviewers and users came to life that were used to these products already. For example, Samsung and LG that are very well established companies in the Western World were outsiders in the beginning of 1960s and 70s. They often had to do partnerships as Samsung did with NEC to appear better to the local consumers in the West. Over the next decades, thanks to superior quality of those Asian products they acquired such companies as TV sets company Zenith or brought first digital TVs, which was unprecedented. All this came with quite a bit of criticism and people were accusatory of unfair competition, which was just a cry for more freedom for local companies that were stifled by minimal wages, labor regulations that drove the costs up considerably, making those local companies unable to compete.

This was just Asia in it’s early stages, since the 1960s it created dozens of global-reach companies that were overthrowing Western companies one way or the other. The level of development of these countries is amazing now and the second wave of companies is truly flooding the market with far superior products for the price. The best example for these are smartphones. In 2010, 6 years ago, when the smartphone market was well established the biggest was Apple with iPhone, which is, to this day manufactured in and using Asian made components. Otherwise, it would never be able to compete. The other main competitors were Samsung (S. Korea), LG (S. Korea), Motorola (USA, now bought by Lenovo, China), HTC (Taiwan), Sony (Japan) and some other Asian companies. Do You remember Nokia, maybe? You can see the pattern. What changed since then? Take a look at the latest market share figures.

Q2-2015-smartphone-share

What changed? Apple fell immensely although their profits weren’t hurt (high margins made on clients paying premium price, smart money making performance achieved by Apple). Samsung is first by a big margin. But what’s the most curious here? All other companies are Asian based and these are the ones that grow the most. And as pointed out before, all of them, including Apple use components that are made in Asia and are assembled there. And it is no coincident. The quality of smartphones went up considerably: from high-end, a little buggy, plastic and chunky iPhone in 2007 to budget, polished, metal and slim Xiaomi Redmi Note 3 in 2015-2016. Compare them, if You will.

iphone3gsxiaomi_redmi_note_3

And it’s the same with other markets, whether it’s tailoring of suits, building skyscrapers, cars, refrigerators or jewellery. Asians will do it cheaper, better and faster on average than an American or European will do and these markets will be swallowed by Asian companies as well in the future if nothing changes. The only solution by corrupt governments of ours is to tax and regulate everything, so that the Asian products won’t reach the citizens (legally, f.e. people buy millions of Xiaomi phones anyway) or create a propaganda that it’s unsafe or, as we’ve discussed, that it is of poorer quality. The only thing it reminds me of are socialist countries in Eastern Europe like East Germany, Poland or Soviet Russia before 1990s. They didn’t allow people to purchase “bad” Western or Asian cars like Mercedes or Toyota and were boasting about their local, over-regulated jokes like Trabant.

trabant__601_1990_1_lgwgoldmk2

That was 1990s Trabant (“East Volkswagen”) 601 and proper Volkswagen Golf Mk2. Now this was near the death of the Eastern block, but Trabant was produced since 1957… Take a look at the Chinese vs Western car:

changanrenault

Now, the European market is already over-regulated, which ties hands of local manufacturers and drives the costs up. Comparable SUVs in Europe are significantly more expensive than Chinese ones, while offering weaker engines and smaller spaces. And the reign of EU hasn’t finished yet. Wonder, how will cars compare towards the end of European Union.

Summary
Most people’s instinct about foreigners and their products is to fight, ridicule and ban them. However, that is not the solution. If we do that we will not only be behind the whole world, where those superior products are accessible, but also we’ll be tying our hands together by not developing faster thanks to those achievements. The best way to have such products designed and made locally is to do what Asians did – lower the taxes, get rid of pathetic regulations from bureaucrats and benefits systems giving incentives not to work, but become lazy slobs that only strike. If we won’t go the capitalistic way, we will end up as bitter, poor socialist nations that, sooner or later, are conquered or bought by more powerful entities.

SofRepcolor083115-905x701

Leave a Reply

Your email address will not be published. Required fields are marked *