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The Growing Pains of China

August 8, 2016
Plain English Version
Rice cookers for sale. Photo credit: AP/Koji Sasahara, File THE ASSOCIATED PRESS

Rice cookers for sale. Photo credit: AP/Koji Sasahara, File THE ASSOCIATED PRESS

Years of making low-cost products for low wages are coming to an end in China. Chinese exports are not growing. Jobs are moving to countries such as Cambodia and Vietnam.

At the same time, the Chinese people have become richer. The people want to live a better life. They want to buy better products.

The rice cooker is a good example. Rice is a big part of the Chinese diet. The rice cookers preferred by Chinese people are made elsewhere. Rice cookers made in Japan are the most favored.

Chinese people do not seem to like products made in China. Chinese tourists like to go to Japan. They return with suitcases full of Japanese-made goods.  Many buy their cosmetics and electronics outside of China.

To combat this, a Chinese appliance maker advertises, “You do not have to go to Japan to buy a rice cooker.”

The Chinese government sees the problem. It believes the solution is to make better products to sell to its domestic market. It believes that this will make the domestic market grow. The solution is not that simple.

Counterfeit products made in China are a big issue. Even good products made in China lead to cheap imitations made in China. The Chinese government wants this to change. It wants “innovation.” It wants better quality products.

An expert said, “It is not surprising Chinese consumers lack faith in domestic brands. Chinese companies have competed on price. So people cut corners. People stop believing in made-in-China products.”

This leads to a big question. How good are the Chinese products made to sell for export? If Chinese consumers do not trust Chinese products why should the rest of the world?

Source: The Wall Street Journal August 3, 2016

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