Friday, February 13, 2009

Chinese Manufacturers Attempt to Ditch "Cheap" Image


    It's already conducting market testing for its high-end SUVs in the world's biggest consumer market – theUnited States, and now Chery, a leading Chinese automaker, is eying Latin America as the fastest-growing market. Urban Latin Americans are potential buyers of reliable, but inexpensive Chery cars.


    The Anhui-based Chery and its peers hope to copy the South Korean miracle of expanding auto sales into every corner of the world. A Chery senior manager said at the Changchun International Automobile Fair that his company was planning to launch, with Argentina's SOCMA Group, a joint venture in Uruguay.


    Cars are not the only Chinese commodities flooding Latin America. Guangdong-based home appliance giant Gree supplied about 2,400 air conditioners for the Pan American Games media center and athletes quarters in Rio de JaneiroBrazil. Some 5,600 athletes and journalists from 42 countries and regions cooled off to China-made air conditioners.


(The Haier resembling line)


     ZTE Corp., a Chinese telecom supplier, sold 1 million cell phones in the first half of 2007 in Venezuela and plans to invest in a local cell phone manufacturing base churning out more ZTE handsets. With relatively low prices, high quality and technological advantages, including 3G and other technologies, ZTE has drawn local partners in BrazilPeruVenezuelaArgentina and Colombia. The latest available revenues of ZTE in Latin America were 400 million U.S. dollars in 2005.


    China also has some already recognized brands, such as Haier, the world's fourth largest electric appliance manufacturer, which has been promoting innovative high-end refrigerators since April in Latin America. Haier says it has received orders from dozens of countries.


    To some extent, these quality products have provided a counterbalance to recent controversies over Chinese exports to the rest of the world. The "poisonous toothpaste" issue, the Panama medicine issue and the U.S. ban on marine exports earlier this year aroused distrust of Chinese exports worldwide. For some, "Made in China" seems to mean "Buyer beware".


    Foreign Ministry spokesman Qin Gang has said that China had been very responsible to ensure the quality and safety of its exports, in processing, packaging, delivery or sales. The government has striven to implement laws to supervise and manage the product manufacturers.


     More than 99 percent of food exports to the U.S. in the last three years met U.S. quality standards, higher than the equivalent figure for U.S. food exports to China, Qin said. "Products with problems are a tiny minority, those reported by the media cannot blemish all Chinese exports."


    Qin acknowledged the controversial products stemmed from misunderstanding, unscrupulous vendors at home and abroad, and different regulations and policies in imports and exports examination between Chinaand other countries.


    Lin Wei, a senior official with the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), says that the government has focused on food safety problems and increased regulatory oversight gradually.


    The AQSIQ announced on July 11 that toothpastes containing diethylene glycol (DEG) were banned from import and export. In exceptional cases that the chemical finds its way into toothpaste with other ingredients, quantities must not exceed limits set by importing countries or regions. Toothpaste factories have been banned from using EG as an ingredient.


    The AGSIQ says the long-term use of toothpaste in which the DEG content is less than 15.6 percent would have little adverse effect on the human body. None of the data suggested that toothpaste containing this substance had directly led to the harm.


    The statement was intended to highlight China's efforts in raising industry standards to the levels of those in other countries.


    The Oral Health Supplies Certification and Management Regulation has been formulated by the State Certification and Accreditation Administration (CAA) and the Ministry of Health. The CAA is also drawing up stricter certification and grading procedures for the toothpaste industry in China in line with the oral health supplies certification standard of the American Dental Association.


    No evidence was found to support any organized violation of product safety standards in China and the government has taken drastic measures to locate and punish companies that do break the law. However, voices of doubt abroad may still deter consumers from treating Chinese goods objectively.


    Yu Lixin, a research scholar at the Chinese Academy of Social Sciences' Institute of Finance and Trade Economics, urged Chinese firms to improve the image of Chinese products.


    "China should satisfy the demand for higher-end products in the international market by adding innovative features," Yu said. "China should transform itself as soon as possible from a powerful trading country to a country with innovative competitiveness."


    Competitive Chinese companies, with their own intellectual property rights, are advised by Yu to show their products at international fairs and other global showcases.


    Future international competition lay in struggling for intellectual property, technical standards, and other non-tariff barriers, Yu warned.


    "The government will play an irreplaceable role in perfecting the industry technical standards, which can't be accomplished in a short time," Yu said.


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