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that book about china

China has recently been hit with a number of food and drug scandals. As I’ve written before, two of China’s primary causes of quality failures involve either (a) the country’s “saving habit” taken to an extreme or (b) a “counterfeiting culture” that leaves buyers wondering whether they have purchased the real thing. Going to keep this post short and list a brief description of the scandal, with a web link.

Case One: Nearly two tons of pesticide-tainted chives were destroyed in Qingdao.

Case Two: Researchers believe that as much as 1/10 of all cooking oil used in China is used oil.

Case Three: Vegetable sellers have been caught dyeing green beans to make them appear more fresh.

Case Four: Excessive heat may have caused vaccines to go bad, leading to the deaths of several children.

Case Five: Producers have been bleaching flour using quicklime, a harmful substance.

One of the greatest threats to consumers at home remains China’s food supply chain. America’s Food and Drug Administration (FDA) has set up offices in China, an unprecedented move, one that suggests authorities understand the risks that are present. And perhaps knowing that the next big food or drug scandal out of China is unavoidable, U.S. media have concentrated attention on problems in our supply chain (because if we have our own issues, then China doesn’t look quite as bad — get it?).

China’s case is more worrisome than America’s. One of the reasons that this is true is that vendors there are more willing to risk lives to save only the smallest amounts of money. Sellers in China also go out of their way to alter their merchandise, doing it often in a way that makes detection difficult. This second source of product quality failures involving the “counterfeit culture” is what concerns the most.

I look at the scandals in that list above and think most about cases “three” and “five,” and maybe “two.”

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A number of people have been made upset by the cover of Poorly Made in China. You would think that their problem has been with the title, but in fact it is the graphic design that has raised ire. Here are two letters published by Chemical & Engineering News, in response to a book review it printed.

I’m a Chinese grad student studying chemistry in North America, and usually C&EN is one of my favorite publications. However, the review of the book Poorly Made in China makes me feel extremely uncomfortable. The word “CHINA” with a broken A on the book’s cover and reproduced in the review is very insulting. How would you feel if you saw “USA” or “CANADA” with a broken A?  – Chao Fang (Toronto)

The review of Poorly Made in China was interesting, and the reviewer gave interesting advice on doing business in China. What troubles me is the book’s cover, which was reprinted in the magazine. It makes one question the political position of the book’s author, its publisher, and even the review’s publisher toward China and the intent behind torturing the word “CHINA.” – Yong-Kang Zhang (San Jose)

A little background: While in the middle of writing the book, my publisher sent over a cover design that was was a concept meant to convey the idea of “quality fade.” One of the letters was nearly transparent. I thought that it made the title too hard to read. I suggested they tilt the last letter instead, and I mentioned something like a position of 2 o’clock. The designers took the basic idea but made it their own. The final result was a book jacket that catches the eye and which won a design award at a book fair.

On the picture posted here, I caught this in a small bookshop – Freefall by Joseph Stiglitz placed on a shelf next to Poorly Made in China. I’d seen Stiglitz’s recently-published book online and didn’t think too much about its cover design. Placed side-by-side, though, the similarities are curious. If only his publisher had chosen to flip a different letter, and could they not have gone for a color other than scarlet? Anyway, I should probably thank his publisher, since they’ve given me an answer to those who want to complain about a dangling “A.”

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Poorly Made in China will soon be available in Chinese. For those who don’t know, Chinese can be written in one of two forms. Simplified characters are used in China, and traditional characters are used in Hong Kong, Macau and Taiwan. My publisher just sold the right to Orthodox Chinese, or traditional characters.

There’s still no word on whether a anyone on the mainland is willing to translate, but we are talking with publishers there. That’s all I can offer on the subject at this time (and thanks to the many who have asked when we can expect a version for China).

Also on the foreign rights front, we just sold transltaion to Indonesia. I have no idea about the book market there, but Indonesia is the world’s fourth most populous nation with 230,000,000 people, and so we are adding a large number of potential readers with this rights deal. Poorly Made in China is making the rounds. Stay tuned.

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Story One: Hacking of Energizer Duo Battery Chargers. Energizer battery chargers made in China have been found to have “trojans” loaded onto them, so that when the devices are plugged into a computer via USB port, a backdoor is left on the machine that makes it possible for someone to hack it from afar. This sort of news of course raises questions like: Who is behind the malware, and why did they do it?

Marcus Sachs, a former National Security Council member and a member of the CSIS Commission on Cyber Security under the Obama administration, is downplaying the incident. In an article on CNET, he suggests that China may have once had problems with malware — back in the old days, meaning 2007? — but that things have changed. LOL moment: His suggestion that the malware is just a bit of shmootz, an issue with hygiene:

If the Trojan does date back to 2007, that is around the same time that there was a rash of products like digital photo frames hitting U.S. shelves infected with malware, said Marcus Sachs, director of the SANS Internet Storm Center. ”This may simply be from that time frame when all the factories in China were not clean and many were putting malware onto stuff, not intentionally but because the hygiene wasn’t good…”

Story Two: Tainted Chinese Fluoride. A water works company in Massachusetts has been getting its fluoride from China, and it believes that what they’ve been receiving is actually a kind of counterfeit. From one report:

Department of Public Works Director Rob Desmarais said after he mixes the white powder with water, 40 percent of it will not dissolve. ”I don’t know what it is,” Desmarais said. “It’s not soluble, and it doesn’t appear to be sodium fluoride. So we are not quite sure what it is.”

Desmarais said the residue clogs his machines and makes it difficult to get a consistent level of fluoride in the town’s water. Since April the fluoride pumps in Amesbury have been turned off and they will stay that way until Desmarais can find out what’s in the fluoride that’s imported from China.

Because this one affects public water supplies, some are suggesting it is a homeland security issue. I don’t know about the categorization, but I know that there are persistent quality problems out of China, and that these problems are often of the intentional variety.

I am more concerned about the fluoride case than the trojan case. The high level of game-playing in China manufacturing processes combined with a cultural inclination towards counterfeiting goods, mixed in with the nature of chemistry, suggests a high level of risk associated with chemical products in particular, one that is not appropriately being factored into the bilateral trade picture.

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Weeks before China’s annual People’s Congress, I suggested that China would not announce a currency revaluation, despite predictions made by some. I gave partial reasoning, here:

Many in the U.S. believe “China is in a bubble.” This may be the case, but it is not a sentiment shared by average Chinese. In South China, compared with a couple of years ago, the buzz has gone, and people are no longer as optimistic as they once were. There’s more grumbling about corruption. Macroeconomic numbers suggest rocketing growth, but on the ground there’s this odd feeling that the air has been let out of the tire.

Looking into my crystal ball, I suggested that Premier Wen Jiabao would instead focus his address on the yawning gap between rich and poor in China. I had to do some looking around online, but here’s something that I picked up today from a news agency out of Latin America:

The speech touched on many issues, but on a number of occasions the premier spoke about the need to make China a fairer society. “We will not only make the ‘pie’ of social wealth bigger by developing the economy, but also distribute it well,” Mr Wen told about 3,000 delegates, returning to a theme that he has often spoken about during his premiership. “[We will] resolutely reverse the widening income gap,” he added later, in a speech that lasted more than two hours.

I would have preferred a quote, but there was no explicit mention of this aspect in their article, “China Premier Details Economic Plan. Now, what do we make of all that earlier commentary coming from the U.S. on a possible currency revaluation out of China? These weren’t predictions at all, it turns out, but are signs of desperation from an American economy that is in much worse shape than many of its leaders are willing to admit. Beijing knows this, by the way.

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Library Journal just published its best business books of 2009 list, and we again made the cut. By way of background, Library Journal is the most widely circulated publication for librarians in the United States. The periodical was founded in the 19th century by Melvil Dewey, the guy who invented the Dewey Decimal System. Some of us are actually old enough to remember what this is, or what it was like to find a book using a card catalogue! I’ve spent more than my fair share of time in libraries, and so this latest piece of news is a bit of fun, as well.

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Audio books are a public good.

They get material to those who struggle with learning disabilities, and they are helpful to so many who simply can’t find the time to read. Others are disadvantaged in other ways. I know someone who gets travel sick when reading from a book on a plane. Another, a close family friend, is struggling through advanced stages of ALS (Lou Gehrig’s Disease) and can no longer hold a book, or turn a page.

Several months ago, when Audible.com got in touch and asked whether I wouldn’t mind narrating Poorly Made in China, I agreed to get involved.

At one point or another, I have purchased and listened to books that are professionally narrated, and I have found many such productions to be lacking. The few author-narrated books I’ve managed to catch, including Elizabeth Gilbert’s Eat, Pray, Love and Malcolm Gladwell’s What the Dog Saw convinced that there is at least some value in having an author read his or her own material.

The audio version of Poorly Made in China runs 8 hours and 3 minutes. For those interested, a sample is available on Audible.com.

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Most of the time, when the rights of a brand are infringed upon in China, manufacturers have taken a familiar-sounding name and made only a slight variation. They try to keep the name as close to the original as possible. Sometimes the efforts of these bootleggers make for some good comedy. I recall buying a suit in Hong Kong several years ago and having the tailor try to sell me on a material produced not by Ermenegildo Zegna but by Mario Zegna — presumably a cousin of the Italian designer.

Others have written about Chinese efforts to rebrand popular Western trademarks. One that I found particularly amusing was a slight twist on the “Esprit” brand. Pictured at the top here, this backpack has a logo that mimics the original but uses a brand that looks a lot more like like “Spit.” Companies worry that counterfeiters will dilute their brand, and this sort of example drives home that point.

Sometimes copied names are not similar at all, though. Consider the second and third pictures here. One is of a ball carrying the logo for Wilson Sporting Goods. This other is for a Guangzhou-based sporting company called Menlow.

Wilson versus Menlow? Without looking at the pictures, you’d think that the two names are nothing alike, but consider what’s been done: The scripted “W” from Wilson has been turned upside down so that it becomes the “M” in Menlow. They’ve done something similar with the “N,” changing it into a “W.” They preserved the tall, scripted “L,” and the net effect is a logo that from a distance and without too much thought looks quite a lot like the original!

I’ve often passed a Menlow shop in Guangzhou and wondered what executives at Wilson would make of the logo. Do they even know that the logo or the copycat company exists? Would also be a little more than curious to see how a Chinese court would handle any claim of copyright infringement. My bet is that “Spit” might find trouble, but that Menlow would be allowed to carry on — even though its logo appears similar and it is also in the business of selling the same kinds of sporting goods.

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Several days ago, some suggested that China was on the verge of revaluing its currency. I proposed that it would not, that we should all look for another move instead:

China will announce a major shift in economic policy, and that shift will have little (or nothing) to do with the currency exchange rate. China’s economic policy shift will please the U.S. a little, while satisfying its own people more. Any new economic policy introduced will have far less to do with an attempt to rebalance the global economy. It will have instead more to do with an effort to reduce wealth disparity in China.

This is from a two-hour, online “town hall meeting” led by Premier Wen Jiabao. There’s a bit of “satisfying its own people” and “effort to reduce wealth disparity” here:

Turning to the yawning gap between rich and poor, Wen said Beijing would strive to boost wages and make it easier for migrant workers to settle with their families in smaller cities. ”If the wealth of a society is concentrated in the hands of a few people, then that’s unfair and that society is doomed to be unstable,” Wen said.

How do I do it? I honestly don’t know.

Anyway, it’s at least a bit interesting that Beijing is claiming to take an active role in increasing wages when market forces are more likely the cause. According to NYT, labor rates have been bid up as much as 20% in recent months. Seems to be happening all on its own.

**UPDATE: A number of local newspapers are pushing now for reform of the household registration system that has divided urban dwellers and rural folk, though Wen Jiabao’s government already hinted they were looking into making it easier for migrant workers to move about the country. Thought I would link to the relevant news event since this ties into new efforts to bridge the rich-poor gap in China.

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You don’t need a background in marketing to know that there is something a little weird about this campaign to tie together Australian red wine and cranberry juice (see pic). The packaging may say something about how unsophisticated the market in China really is. So many things are new to the Chinese, and so there is always the opportunity to introduce new concepts and pitch them as “accepted” in the West. On the other hand, this boxed up set may say something about those who market goods in China. If you’re working in an environment where you think consumers can be talked into just about anything, then you really can “play by your rules.”

I took this picture in South China 7-Eleven shop. For those who don’t know, it is not uncommon for Chinese to mix red wine with carbonated beverages like Sprite. You can probably imagine why they would want do so — soda adds sparkle. On this other mixture, though, I can’t guess why someone would want to combine wine with concentrated fruit juice, unless the point is only to dilute the alcoholic beverage. If it’s about sweetening the wine, perhaps wine makers could come up with a variety that is different for the Chinese market. If it’s about the magic of cranberries, then perhaps they could try fermenting that fruit instead.

There are probably some China marketing gurus who will say, “this is another example of a company that is localizing their product for the China market.” In the end, it was probably not a marketing decision, but a project that came about for business reasons. This campaign might merely be an example of what happens when finance directors play at marketing.

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