Poorly Made in China by Paul Midler was one of the Economist’s best books of the year for 2009 and two years later it remains a subject for discussion among people who manufacture in China. I have a copy of it but had not picked it up until recently when one of my customers read it and asked me about it.
I have mixed feelings about Poorly Made In China. In some ways it is a very useful book because it illustrates quite well what a difficult place China can be to do business. I get emails frequently from prospective customers who are going through what Midler describes. And I have had these experiences myself, dealing with vendors who just fail to comprehend the long-term mutually beneficial nature of the relationship you are trying to forge, but who are instead focused only on cost-cutting and short-term profits. It is aggravating to say the least.
Still, I do question some of Midler’s experiences in China, raise my eyebrows at how he handled certain situations and ask myself why the US company he was working for would persevere in a relationship with such a problematic, corrupt vendor. My experience is that if you begin to have problems with a vendor – and I mean serious problems like Midler’s client was having with its Chinese vendor e.g. widespread quality issues, rampant dishonesty, a refusal to accept responsibility – then you start looking for a new vendor, and ASAP. Midler’s advice to his client, on the other hand, was always to give the vendor the benefit of the doubt. Eventually the relationship soured. Midler’s client was looking for a new factory and Midler was looking for a new client.
In another section of the book, Midler receives a price quote from a vendor, and passes this quote on to his customer. When the customer shows up in China to negotiate a contract, the vendor raises the cost substantially telling Midler that he misunderstood the quote which, as it turns out, Midler never had in writing to begin with. That fact that Midler passed on to his customer an important quote that he had received only verbally makes one wonder.
Midler’s take on the Canton Fair is also off the mark. He says that one of the big problems with the fair is that vendor costs are arbitrary and often discriminatory, changing depending on who is the buyer. Of course this is the case. This is China. Business ethics that are taught in the West simply do not apply in China, and that is why it can be such a difficult place to do business. Midler grasps this – obviously – but he cannot accept China on its own terms. I would add that the barter-like negotiating at the Canton Fair is not an issue if you have target costs in mind. Vendors either meet your costs or don’t. On the fair he writes further: “Experienced traders were largely of the opinion that the trade show was for suckers.” The truth is that many companies – small importers and established publicly traded companies – attend this show regularly and it remains one of the largest trade shows in the world. Even savvy Hong Kong traders show up at the fair looking for mainland suppliers. Short of a referral from a trusted friend or acquaintance, the Canton Fair is the single best place to meet vendors in China. About the fair, Midler elaborates “I actually enjoyed the fair and attended whenever possible.” Go figure.
Still, I would recommend “Poorly Made In China” to people who are doing business in China because it does paint a very accurate picture of how difficult it can be to manufacture there. I would qualify my recommendation by pointing out that there are, nevertheless, good vendors in China ( Midler makes it sound as if there are none). It just takes time to find them.
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