By Wei Jigang & Zhao Changwen

Research Report Vol.19 No.5, 2017

Manufacturing quality fully embodies the comprehensive strength and core competitiveness of the manufacturing industry of a country, and reflects the extent to which the manufacturing industry meets the demands for social and economic development. As a manufacturer of quantity, China has made marked progress in manufacturing quality in recent years, but it still faces the prominent problem of low overall level. Especially, the problem has become even more acute as the global competition pattern of the manufacturing industry changes and China has entered a new normal in economic development. It has become an important issue that needs to be solved to accelerate efforts to raise manufacturing quality level, raise the competitiveness in all respects, and turn China from a manufacturer of quantity into one of quality.

I. The overall Condition of China’s Manufacturing Quality

1. Some manufactured products have reached or approached the international level

After over 30 years of rapid development, the Chinese manufacturing has not only achieved its historical transition from small to big, but also seen great quality improvement. The quality of some major equipments, consumer products and hi-tech products has reached or approached the level of that of developed countries^①, and a number of manufacturing firms which have high quality competitiveness and lead the industrial development; advanced equipments have been manufactured, including the Shenzhou-10 manned spacecraft, the deep-sea manned submersible Jiaolong, J-15 Fighter, BeiDou Navigation Satellite System, supercomputers, high-speed railway equipment, high-voltage power transmission and transformation equipment, 1,000MW ultra-supercritical thermal power generating unit, and 10,000m deep-sea oil drilling equipment.

2. Low overall level of manufacturing quality

First, there is a large gap between the overall product quality of China and that of developed countries. Western manufacturing countries and Japan occupy a leading position in overall quality level, performance and stability, quality reliability, environmental adaptability, and service life of product. In contrast, China has a low overall level of manufacturing quality, a far cry from consumers’ expectations and its status as a manufacturing country of quality. The average acceptability of manufactured products of western countries and Japan has reached 4.5sigma (99.99932%), while that of China is merely 2.5sigma (98.76%)^②. In China, the quality stability, reliability and service efficiency of important products including auto, numerically-controlled machine tool, construction machinery, farm machinery and special equipment are relatively low; the function, grade, quality consistency and stability of iron & steel, non-ferrous metals and chemical products need to be improved; basic parts and components and consumer electronic products feature low reliability and short service life; a small number of products with high added value and high functional characteristics still rely on import; and a sound full-lifecycle quality safety traceability system for some foods, drugs and infant & children products involving personal safety has not yet been established^③.

Second, counterfeit and shoddy products emerge persistently. According to a survey of the European Union (EU), in 2011, the customs of the EU members discovered and seized counterfeit and shoddy products amounting to EUR1.3 billion, 73% of which are Chinese products. In recent years, China has been hit by food safety scandals like “melamine”, “toxic capsule”, “lean meat powder” and “plasticizer”, etc., making many Chinese lose their confidence in food safety. There are quite a few counterfeit or shoddy products in the field of electronics manufacturing, for examples, low-quality components and parts are polished and painted with logos of other famous products for the purpose of adulteration, low-performance chips are packaged and painted with logos of high-performance products; in the mobile phone market, the sales amount of contraband mobile phones accounts for approximately one fourth of the total sales amount of mobile phones sold through regular channels in China, and it is heard from time to time that inferior mobile phone users are wounded due to battery explosion^④. For a period of time, “Made in China” is often treated as a synonym of cheap, low-end and poor-quality products, and “hidden killer”.

Third, China is lack of world-class manufacturing brands and lags behind developed countries in terms of quantity, reputation, popularity, and creditworthiness of famous manufacturing brands. China has 1.7 million proprietary manufacturing brands, most of which have problems of low market recognition, low added value of brand, poor reputation and low loyalty, etc. Compared with the speed and scale of manufacturing development, China’s brand building obviously lags. Most manufacturers have poor strategic management and marketing abilities and are lack of experience in international competitions; some companies mainly engage in subcontract manufacturing and have not established their own proprietary marketing channel and brand; quite a few firms consider that brand is only related to image and advertising but have not realized the intrinsic value of brand; many enterprises have inadequate capabilities of brand cultivation, and it is hard for them to transform their capabilities and advantages into brand values that can be perceived by customers^⑤. According to incomplete statistics, 90% of well-known trademarks of the world equipment manufacturing industry are owned by developed countries, and over 90% of China-exported goods are OEM products. According to the “Most Valuable Global Corporate Brands 2014” released by Interbrand, a global brand consultancy, Huawei, the only Chinese manufacturer in the list, ranks the 94th^⑥.

3. Adverse effects of manufacturing quality problems

First, weakened industrial competitiveness. If the problem of low manufacturing quality remains unsolved for a long time, it will severely hinder the enhancement of industrial competitiveness and make the Chinese manufacturing stay at thelow side of the global value chain. The existence of some key common problems that affect quality improvement will greatly hinder quality advancement. Quite a few consumers prefer to spend more time and money on buying foreign goods. According to statistics, Chinese residents spent up to RMB1.5 trillion overseas in 2015, at least half of which were used for shopping, and the goods they purchased have shifted from previous high-end luxury goods to cost-effective daily consumer goods.

Second, damaged national image. In recent years, the quality problem of the manufacturing industry has become a major cause for the western media attack China. The Chinese products imported by western countries including food, fodder, toothpaste and toys have faced unprecedented quality challenges, and for this, the western countries set restrictions on import of Chinese products. Due to the hype on the quality problem of Chinese products, consumers of developed countries become increasingly skeptical about the quality of Chinese products.

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