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For anyone who found this tale interesting, "Poorly Made in China" is a well-written and eye-opening account of similar antics. http://www.amazon.com/Poorly-Ma

For anyone who found this tale interesting, "Poorly Made in China" is a well-written and eye-opening account of similar antics. http://www.amazon.com/Poorly-Made-China-Insiders-Production/dp/0470928077 http://www.amazon.com/Poorly-Made-China-Insiders-Production/... Much like the kickstarter project mentions, this book covers repeatedly broken promises, misleading claims (like the laser etching that turned out to be CNC), continuous reassurances followed by convenient disappearances, completely mythical factory sites and machinery, supposedly mechanical processes that turn out to be skilled hand-labor, and the need for vigilant and cynical quality control. It makes a convincing argument that once you account for the cost of all these shenanigans, export manufacturing is nowhere near as good a deal as it seems.

derleth 15y ago
Are there any explanations about why China is like that?
- catch23 15y ago
  capitalism at work. price has always trumped quality there, probably due to a much poorer middle class than any other 1st world nation.
  - pnathan 15y ago
    And capital will flow to the more ethical shops that don't lie to their customers.
    - _delirium 15y ago
      An interesting hypothesis, but I would guess not an accurate one on average, due to difficulties in the information-transmission process.
      - pnathan 15y ago
        Well, judging by the fact that this particular group switched to a more ethical factory, I don't know what you are talking about.
        PakG1 15y ago
        The question is whether the unethical factory would go bankrupt. Information inefficiency and asymmetry prevents stories like this from being widespread to other potential product companies. So other product companies don't know what to expect and then have to experience the same mistakes. Even if an online directory and feedback mechanism were created, those are horribly easy to game if one wanted (see Yelp). My friend who used to work at Alibaba said fraud was rampant among the vendors listed on the website. I expect that the large demand for production facilities from abroad, coupled with information inefficiency and asymmetry, will allow the unethical factory to continue to make money.
- barkingcat 15y ago
  When the average annual income in China is around $4000 USD, it's no wonder that people would lie through their teeth to get at a contract. This is the answer to the "lowest price at any cost" game. Capitalism at work. No one wants the company that offers the best quality, only the company that is the cheapest.
  - jrockway 15y ago
    When outsourcing to China, anyway. Your new quad-core Intel processor was not outsourced to China, because it's cheaper to get quality in the US.
    - little_droog 15y ago
      I believe your Intel example has very little to do with the cost or quality of manufacturing in China and more to do with export restrictions on current generation semiconductor fab equipment. Intel does operate a fab in China but is based on an older 65nm process.
  - rubashov 15y ago
    > Capitalism at work. Bullshit. It's Chinese at work. Similar stories from dealing with Indians. Poverty is not an excuse. Wild hypothesis: Maybe they're poor because they cheat each other all the time. When the Japanese were dirt poor back in the 60s people didn't have complaints about them regularly shafting everyone in business. Same for the Taiwanese.
    - dimmuborgir 15y ago
      > "back in the 60s people didn't have complaints" How do you know? There was no internet back then and such stories usually don't appear in newspapers, even now. > "Maybe they're poor because they cheat each other all the time." No, they're poor because it's been just 30 years and 20 years since China and India opened up (liberalized) their economies respectively and these two countries have massive population.
    - Steko 15y ago
- megrimlock 15y ago
  One nice thing about the book is that it gives sympathetic economic context to some of these issues, humanizing what might otherwise seem like utter fraud. Briefly, it's a combination of: - inevitable human motives when faced with a chance to escape poverty - different cultural expectations about what it means to deliver on a manufacturing contract (i.e. does it have to always be exactly to spec, or can it just be roughly equivalent in the important ways) - different cultural focus on surface appearances vs. less visible qualities - information asymmetry between local operators and distant foreign counterparties - greed on the part of foreign counterparties, which the Chinese manfucaturers exploit to get deals and then ruthlessly trim back everywhere they can get away with, backing off only when they push too far and get called on it What's almost as interesting are the similarly misaligned incentives within the foreign counterparties. Western capitalist companies are unabashedly greedy, short-term (gotta make the quarterly numbers), share-price-oriented, and have all their own dysfunctions as a result. That's not to say the kickstarter guys are guilty of any of that -- just that there's plenty of parties trying to screw the other on both sides of this international dynamic, and finding a truly honest partner is difficult in business anywhere.
  - rubashov 15y ago
    > humanizing what might otherwise seem like utter fraud Most of your list can just be filed under "unscrupulous and untrustworthy". No need to make excuses for Han Chinese characteristics.
- wiradikusuma 15y ago
  Because you get what you pay for, and because there are too much demand that they don't care if they screw you and lose their reputation (to you)--They can simply find another buyer. At least those are the reasons my friend told me about his experience with manufacturing in China.
nickpinkston 15y ago
While these types of horror stories are everywhere - some of the best consumer goods manufacturers (by quality and price) are in China / Taiwan. While working to find injection molding and CNC suppliers - people continually referred me to their vetted suppliers in Asia. The general consensus in my work was that Asia wants it more than we do. There are a lot of superfluous American manufacturers that survive based on old relationships and word-of-month, not on quality, price & innovative marketing - the former ones are becoming harder and harder to win with. The Chinese manufacturing sector is ultra-competitive with each other, more than in the US, and this leads them to their position - beyond just being cheap labor. This is at least my experience.
- forgottenpaswrd 15y ago
  "The general consensus in my work was that Asia wants it more than we do. There are a lot of superfluous American manufacturers that survive based on old relationships and word-of-month, not on quality, price & innovative marketing " The general consensus in my work(engineering on a German multinational company) is that ANYTHING that is worth something on China is made from Europeans, Americans, or Japanese people. This multinational is going to China because you don't pay taxes for something like 5 years, minimum taxes after 10 years there and so on... Of course, once there they steal your plans and know how(as they force you to have Chinese partners), and a Chinese company starts making exactly what you used to, with very poor quality but at half or quarter of the price(they got their knowhow free from western greediness).

derleth 15y ago

Are there any explanations about why China is like that?

catch23 15y ago
capitalism at work. price has always trumped quality there, probably due to a much poorer middle class than any other 1st world nation.
- pnathan 15y ago
  And capital will flow to the more ethical shops that don't lie to their customers.
  - _delirium 15y ago
    An interesting hypothesis, but I would guess not an accurate one on average, due to difficulties in the information-transmission process.
    - pnathan 15y ago
      Well, judging by the fact that this particular group switched to a more ethical factory, I don't know what you are talking about.
      - PakG1 15y ago
        The question is whether the unethical factory would go bankrupt. Information inefficiency and asymmetry prevents stories like this from being widespread to other potential product companies. So other product companies don't know what to expect and then have to experience the same mistakes. Even if an online directory and feedback mechanism were created, those are horribly easy to game if one wanted (see Yelp). My friend who used to work at Alibaba said fraud was rampant among the vendors listed on the website. I expect that the large demand for production facilities from abroad, coupled with information inefficiency and asymmetry, will allow the unethical factory to continue to make money.
barkingcat 15y ago
When the average annual income in China is around $4000 USD, it's no wonder that people would lie through their teeth to get at a contract. This is the answer to the "lowest price at any cost" game. Capitalism at work. No one wants the company that offers the best quality, only the company that is the cheapest.
- jrockway 15y ago
  When outsourcing to China, anyway. Your new quad-core Intel processor was not outsourced to China, because it's cheaper to get quality in the US.
  - little_droog 15y ago
    I believe your Intel example has very little to do with the cost or quality of manufacturing in China and more to do with export restrictions on current generation semiconductor fab equipment. Intel does operate a fab in China but is based on an older 65nm process.
- rubashov 15y ago
  > Capitalism at work. Bullshit. It's Chinese at work. Similar stories from dealing with Indians. Poverty is not an excuse. Wild hypothesis: Maybe they're poor because they cheat each other all the time. When the Japanese were dirt poor back in the 60s people didn't have complaints about them regularly shafting everyone in business. Same for the Taiwanese.
  - dimmuborgir 15y ago
    > "back in the 60s people didn't have complaints" How do you know? There was no internet back then and such stories usually don't appear in newspapers, even now. > "Maybe they're poor because they cheat each other all the time." No, they're poor because it's been just 30 years and 20 years since China and India opened up (liberalized) their economies respectively and these two countries have massive population.
  - Steko 15y ago
megrimlock 15y ago
One nice thing about the book is that it gives sympathetic economic context to some of these issues, humanizing what might otherwise seem like utter fraud. Briefly, it's a combination of: - inevitable human motives when faced with a chance to escape poverty - different cultural expectations about what it means to deliver on a manufacturing contract (i.e. does it have to always be exactly to spec, or can it just be roughly equivalent in the important ways) - different cultural focus on surface appearances vs. less visible qualities - information asymmetry between local operators and distant foreign counterparties - greed on the part of foreign counterparties, which the Chinese manfucaturers exploit to get deals and then ruthlessly trim back everywhere they can get away with, backing off only when they push too far and get called on it What's almost as interesting are the similarly misaligned incentives within the foreign counterparties. Western capitalist companies are unabashedly greedy, short-term (gotta make the quarterly numbers), share-price-oriented, and have all their own dysfunctions as a result. That's not to say the kickstarter guys are guilty of any of that -- just that there's plenty of parties trying to screw the other on both sides of this international dynamic, and finding a truly honest partner is difficult in business anywhere.
- rubashov 15y ago
  > humanizing what might otherwise seem like utter fraud Most of your list can just be filed under "unscrupulous and untrustworthy". No need to make excuses for Han Chinese characteristics.
wiradikusuma 15y ago
Because you get what you pay for, and because there are too much demand that they don't care if they screw you and lose their reputation (to you)--They can simply find another buyer. At least those are the reasons my friend told me about his experience with manufacturing in China.

nickpinkston 15y ago

While these types of horror stories are everywhere - some of the best consumer goods manufacturers (by quality and price) are in China / Taiwan. While working to find injection molding and CNC suppliers - people continually referred me to their vetted suppliers in Asia. The general consensus in my work was that Asia wants it more than we do. There are a lot of superfluous American manufacturers that survive based on old relationships and word-of-month, not on quality, price & innovative marketing - the former ones are becoming harder and harder to win with. The Chinese manufacturing sector is ultra-competitive with each other, more than in the US, and this leads them to their position - beyond just being cheap labor. This is at least my experience.

forgottenpaswrd 15y ago
"The general consensus in my work was that Asia wants it more than we do. There are a lot of superfluous American manufacturers that survive based on old relationships and word-of-month, not on quality, price & innovative marketing " The general consensus in my work(engineering on a German multinational company) is that ANYTHING that is worth something on China is made from Europeans, Americans, or Japanese people. This multinational is going to China because you don't pay taxes for something like 5 years, minimum taxes after 10 years there and so on... Of course, once there they steal your plans and know how(as they force you to have Chinese partners), and a Chinese company starts making exactly what you used to, with very poor quality but at half or quarter of the price(they got their knowhow free from western greediness).