Sixty-two percent of Chinese suppliers are increasing spending on quality control, according to a recent survey of more than 200 manufacturers by Global Sources, a global business-to-business (B2B) media company.
Chinese suppliers are responding to foreign buyers' increased concerns about quality following recent news of China-made product recalls in the United States, Global Sources said.
The survey also indicated that even with recent news coverage of product recalls, 66 percent of respondents expect their exports to increase over the next 12 months.
Regarding spending plans for the year, 10 percent of respondents said they are increasing quality control spending by more than 20 percent, while 26 percent said spending will increase by 10 to 20 percent, and 26 percent will increase it by up to 10 percent.
The one-week survey, beginning September 10, covered suppliers in 11 provinces, with 53 percent of respondents coming from Guangdong Province, where the recalled products were manufactured.
Suppliers surveyed for the report come mainly from consumer product manufacturing industries, including electronics (27 percent), home products (12 percent), telecommunications products (11 percent) and hardware and do-it-yourself products (8 percent).
The majority of spending on quality control is directed toward implementing total quality management procedures in factories, with more than 70 percent of suppliers saying it's the best way to improve overall quality.
"We fully understand that the safety of the products we sell is vital and we work closely with all our suppliers in China and elsewhere to ensure they meet the appropriate regulatory approval standards," said Jeric Ma, vice-president and general manager of Circuit City in China. Circuit City is one of the United States' leading providers of consumer electronics.
"This is to the mutual benefit of the consumers, the suppliers and, naturally, to our company and our brand."
Merle A Hinrichs, chairman and CEO of Global Sources, said: "It is certainly a way to be more competitive at a price point. But, ultimately, the manufacturer and certainly the importer is going to pay the price and it's going to impact the brand - the value of that brand.
"There were defects in 1960s and 1970s when Japan was the primary low-cost manufacturing base for US and European products. When that base shifted to South Korea similar problems occurred. The changes that occurred with South Korean were remarkable and I'm seeing the same situation occur again in China," Hinrichs added.
"Chinese suppliers, as this survey shows, are investing heavily to help their buyers meet these requirements."
(China Daily September 26, 2007)
