Quality and trade: US fights back

One inevitable consequence of the "Chinese low quality" or "Quality fade" debate over Chinese exports was that the perception that goods made in China were poor quality would mean opportunities for exporters TO CHINA to play on the "UK or US produces quality" card.

And so it has come to pass.

This article also touches on transport costs - an important element of trade theory. The implications of such asymmetric costs requires a little thought.

The final comment in this article is also worth highlighting:

“The Chinese customs are very good at sending goods out of the country,” says Mr Kashani. “They’re not so good at getting goods in.”

Welcome to the world of non-tariff barriers.

Quality issues open gap in Chinese retail [FT]

For the past two decades, John Kashani has been buying cheap goods from Chinese factories and exporting them to the US. Now he wants to sell made-in-the-US goods in China, and to do it from Yiwu, a provincial city that has become a shop window to the world for Chinese manufacturers and one of the country’s main export hubs.

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As the quality and safety of Chinese-made products are questioned, Mr Kashani sees an opportunity to enter China by picking out the US-made goods he sources from Wal-Mart – from chocolates to toilet cleaners – and selling them to a growing Chinese middle class with its own quality concerns about Chinese goods.

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China shipped $287.8bn (£141.9bn, €196.6bn) worth of goods to the US last year, while US exports to China totalled just $55.2bn, according to US statistics. What this means for Mr Kashani is that while shipping one container from China to the US costs $3,000, going the other way – a trip many container ships are normally forced to make with empty containers – costs only $900.

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“The Chinese customs are very good at sending goods out of the country,” says Mr Kashani. “They’re not so good at getting goods in.”

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