The 'Made-In-China' Danger

Posted on October 6, 2007 2:40 AM | Permalink | Comments (0)

By Lin Yali | The Epoch Times
October 05, 2007

Ultra low wages paid to workers for ultra-low-cost products

The Wang couple from New Jersey decided to purchase a baby crib on September 22, 2007. "Just as we were leaving the house, a friend of ours called saying that he happened to watch the news regarding the recall of over one million infant cribs that were made in China," said Mr. Wang. "With this new information my wife paid special attention to the crib's country of origin that we were planning to purchase."

On September 21, 2007, the U.S. Consumer Product Safety Commission (CPSC) announced a recall of about one million China-made cribs from among 11 styles designed by U.S. crib supplier, Simplicity Incorporated. These cribs have been sold in the U.S. market through both the Target Corporation and the Babies "R" Us Company from January 1998 to May 2007.

The CPSC pointed out that the drop-side of the crib can easily detach creating a dangerous gap that led to two infants suffocating to death. A third similar fatality is still under investigation. The spokesperson for the CPSC added that the recall is due mainly to defects in the design and not with the assembly operations in China.

That same day, the world largest U.S. toy company, Mattel, apologized to China for the recent recall of 21 million Chinese-made toys. Mattel confessed that among the recalled toys, 87 percent were due to design flaws, while 13 percent were due to use of lead paint.

With several months of bad press concerning the safety of products that come out of China, twists to these recent stories suggest that these U.S. companies share a significant portion of the blame. But consider all the incidents involving China's product safety over the past year, and a definite pattern begins to emerge.

Safety Problems with Chinese-made Products in 2007

Toys	In August, Peru confiscated over 60 tons of Chinese-made toys.	Peruvian authorities believe that toys contain toxic substances including lead.
Tires	In June, a U.S. company dealing with imported tires was forced to recall some 500,000 tires made by China's Hangzhou Zhongce Rubber Co. Ltd. in the wake of a deadly car accident.	Hangzhou Zhongce Rubber Co. Ltd. has failed since 2002 to insert an important gum strip between the steel belts which may result in the tread and/or belts separating from the tire.
Toothpaste	In May, a poisonous ingredient known as diethylene glycol was found in Chinese-made toothpaste sold in Panama, Australia, and the U.S.	To cut costs, the ingredients propylene glycol and glycerine were replaced by the much cheaper, but toxic diethylene glycol
Cough Syrup	At the end of April, at least 365 Panamanian patients died after consuming cough syrups containing diethylene glycol. 100 of these deaths have been confirmed as poisoning.	The toxic glycerin was found to be manufactured by the Taixing Glycerine Factory in China's Jiangsu Province.
Pet Food	Since March, many pets have been poisoned after eating dog and cat food manufactured by the Menu Goods Company. At least 8,000 cats and dogs have become ill and dozens died as a result of eating the contaminated pet food.	Cyanamid dichloride, the poisonous substance found in the pet food's wheat and rice protein powders, were imported by Menu Foods Company from both the Xuzhou Anying Biologic Technology Development Co. Ltd. in Jiangsu Province and the Binzhou Futian Biological Technology Development Company in Shandong Province.

Ultra Low Prices with Ultra Low Wages

With so many stories concerning the safety of Chinese-made products, many in the West have started to ask, "What has gone wrong with China?" As reporters began to dig into the story, many began to reveal the appallingly low wages earned by Chinese laborers. The article "China, The Violin Prodigy" published on the Los Angeles Times on Jan. 13, 2007, mentioned that the violins made in China are "incredible." A violin maker in Studio City, California is quoted as saying, "They're just gorgeous instruments for the price." But at what cost do we enjoy this low price? The following summary from that article shows the hourly pay of workers in mainland China based on both domestic and overseas media reports.

Wages Paid to Workers in China in 2007

	Position	Wage (US dollars)
Shenzhen Longhua Taiyang Electrical Co., Ltd.(Guangdong Province)	Skilled worker with more than one year experience	$0.47 per hour
Taixing Fengling Musical Instrument Co., Ltd. ( Jiangsu Province)	Skilledl worker, violin assembly	$0.50 per hour
Dongwan Toy Industry (Guangdong Province)	Ordinary laborers	$0.25-$0.35 per hour
Guangzhou Haizhu Garment Industry	Ordinary laborers (working 16 hours a day, with two days off a month)	$0.30 per hour
Dongwan Kaiyuan Handbags Manufacturing Industry (Guangdong Province)	Ordinary laborers (working overtime until midnight every day	$93 per month
Dongwan Dongcheng Juwang Shoes Factory (Guangdong Province)	Ordinary laborers (working seven days a week, including frequent overtime at night)	$53 per month

Has Exploitation Reached its Limit?

Cheap labor and poor working conditions have provided China with a competitive advantage in taking the global market by storm, however the products continue to reveal problems with quality. Has the strategy of exploiting low-cost labor to broaden the market share reached the limit?

Toy maker, Chen Dong (alias) in Shantou City, located in China's Guangdong Province, employs more than 200 workers in his factory. For each batch of toys the factory produces, the local authorities will assign two or three inspectors to conduct an on-site examination. Chen says he has to bribe inspectors--otherwise his products would be rejected, labeled "poor quality," and banned from export. Last year, an inspector sneaked into his factory and spotted an underage worker (a month under 16 years old). His factory was fined 40,000 yuan (US$5,329) but Chen bargained with officials and settled the case with 20,000 yuan ($2,665).

Furthermore, world appreciation of Chinese yuan (renminbi) has boosted material costs and squeezed the profit margin. Under such circumstances, the only ways to stay profitable, according to Chen, are (1) sourcing cheaper raw materials; (2) resorting to tax evasion (a method of 70 to 80 percent of Chinese companies) and (3) labor coercion.

"We would like to offer higher wages to the workers, but we simply can't," Chen explained. "The rental expense and labor cost keep increasing, but the selling price keeps falling. It is harder and harder to make money. We do whatever we can do to survive. If we fail, we can't do anything but shut the door."