Rampage 71

Made in China, Worried in America

“A man who has committed a mistake and doesn't correct it is committing another mistake.” - Confucius, 551-479 BCE

There are two sides to every yuan. I have a friend whose business takes him over to China once or twice a year. He’s brought back the usual bevy of street-hawked wares: Waterproof North Face coats with pockets that rip out after one season. Prada purses with the lining sewn in upside-down. (Being that I think $500 purses are asinine, I was OK with my wife owning one of these flawed units for $25.) Custom tailored clothes that never arrive on time. The one bit of street shlock I ordered for myself two or three years ago was a couple of first-run movies on DVD. And they looked fair enough...if you didn’t mind the mandatory subtitles...because the audio was in Mandarin.

So I made a mistake. You can’t buy DVDs for a buck each and expect a $20 product. But last month, my friend was back in Shanghai, and he IMed me to say that he found Transformers and Die Hard 4 for only $2 a pop. “Oh, come on, you know the quality sucks,” I wrote back. “No, I had the guy pop one in, and it looks great!” he replied. But I knew my wife would inevitably buy the DVD for the extras, so I told him to snag it for himself and I’d check it out. The Transformers movie, which he’d bought on faith, turned out to be a screener, or a bootleg captured by someone with a camcorder in a theater. After encoding, the final product looked like it ran at about 10 fps. The good news was that someone only got up in front of the camera during the movie twice. The Die Hard one looked promising. The HD trailer at the beginning of the movie, which is what my friend had watched on the vendor’s portable player, looked gorgeous. The actual movie that followed looked like it was filmed in two colors, blue and white, and was so grossly pixelated with compression artifacting that I couldn’t bear to watch after the first two minutes.

Caveat Emptor-Let The Buyer Beware
You shouldn't have to worry about toys made with lead-based paint, just like your customers shouldn't have to worry about motherboards featuring exploding capacitors. Do some digging into the manufacturing practices of your vendor partners for a better idea of who you want to buy from.

Confucius was right. Once bitten, twice shy.

But praise Buddha, help has arrived at last. Check out this timely news tidbit I discovered in the English edition People’s Daily, one of China’s largest newspapers. The article is titled “New Product Quality Law Implemented in China”.

The newly revised law on product quality came into effect today to offer effective legal guarantee for China's quality promotion.

In the coming five to ten years, economic competition will focus on quality competition, and the improvement of China-made products will be a key factor in China's economic development, said Li Chuanqing, director of the State Bureau of Quality and Technical Supervision. . . . Li said at a meeting marking the implementation of the new law here today that under the revised law, anyone selling fake or inferior products will be severely punished.

Great news! I don’t expect this law to do anything about knock-off street swag, but it might help with things like, oh, the leaded paint used in 436,000 Chinese-made, die-cast toy figures from the movie Cars. By the way, I bought some of these die-cast Cars toys for my kids—not the Sarge ones that got recalled, but the point is they could have been.

And this new law will help prevent other recalls, like the other big Mattel recall of Chinese-made toys, the 9.5 million-unit one for toys with magnets that fall off and become choking hazards. Or the 450,000 recalled Chinese tires imported by Foreign Tires Sales. Or the lead-tainted baby bibs recalled by Wal-Mart. Or the counterfeit pharmaceutical drugs. Or the tainted pet food. Or the toxic toothpaste. And that’s just what gets exported to the U.S. The “goods” that get sold to native Chinese can be far worse. So thank goodness for that new product quality law.

Only it’s not new. That People’s Daily article was written in September of 2000.

Sure, it’s easy to throw stones. Here in the States, we’ve had a century for everyone to forget that the Food and Drug Administration was originally created in 1930 as a follow-up reorganization of the 1906 Food and Drugs Act. This Act, signed into law by President Theodore Roosevelt, was in turn a response to government studies detailing the rampant adulteration and misbranding of food and drugs as well as sensationalist journalism from the likes of Upton Sinclair. Sinclair’s famous 1906 novel, The Jungle, details an immigrant family in Chicago’s Union Stock Yards and the hideous conditions of that era’s meat processing industry. The book is famous for its description of how workers who fell into the lard vats were left there and subsequently became filler in Durham’s Pure Leaf Lard. Following The Jungle’s widespread distribution, American meat exports fell by half. Somehow, lead paint and loose magnets pale in comparison.

What in the world does all of this have to do with computers? Everything. Last year, according to Newsweek, Chinese authorities released a reassuring study stating that less than 20% of the products made for the domestic market were “substandard.” How can a nearly 20% substandard rate be a good thing? If one out of every five PCs or servers you sold was substandard, you’d be flipping burgers next year.

Perhaps you remember in 2002/2003 when there was a rash of cheap motherboards here in America that featured capacitors known for their special ability to bulge, leak, and explode. The story goes that a Japanese scientist at a prominent capacitor manufacturer quit and, secret capacitor recipe in hand, went to work for a Chinese rival. Some of the scientist’s staff member then quit and used the recipe to make electrolyte on their own, which they then sold to Taiwanese capacitor manufacturers at bargain rates. Only somebody somewhere made a mistake in the recipe, and, ultimately, resellers and end-users got to pay the price.

Fast forward to 2005/2006. Remember Sony’s exploding notebook batteries? Millions and millions of them. Those were Japanese, of course, but China scored its own battery bombshell just this last July with the discovery of exploding Motorola and Nokia cell phone batteries coming out of Guangdong Province. How the story of a 22-year-old man being killed by one made it through official news outlets is anyone’s guess. (Motorola asserts that the batteries are counterfeits.)

Truth be told, the best reason I’ve seen to purchase through Intel’s or AMD’s stable platform programs is that they keep retesting participating motherboards throughout their stable image cycle. These boards don’t change. There are no quiet BIOS updates, no on-the-sly component swaps to save a penny here and there. It’s the same board a year after inclusion in the program as it is on launch day, and if the component or board manufacturers slip up, Intel and AMD are there to cry foul and protect resellers.

Don’t think I’m here to slam China or East Asia. China today has its own Upton Sinclair’s, and they fear for their honest lives just as the muckrakers did here 100 years ago. Reform is slow, painful, and complex. Perhaps you caught last year’s coverage of “iPod City,” the Foxconn plants in Longhou and Suzhou, China, that manufacture iPods for Apple. According to U.K. reporters who got inside the facilities, scores of thousands of workers work 12- to 15-hour days, sleep in factory dormitories, and pay up to half of their $50 to $100 per month wages back to Foxconn for food and board. Laborers are subject to physical punishment if they fall out of line. But on the other hand, the money these workers send back home is starting to outstrip the profits from their relative’s farms and transform Chinese society.

We can’t generalize about anything. If Sony, supposedly one of the paragons of quality Japanese manufacturing, can mass produce exploding batteries, no company is immune from suspicion. (And again, let’s not throw too many stones. Exploding Ford Pintos, anyone?) These days, the motherboard manufacturers who aren’t Chinese are probably contracting their manufacturing to China. Optical drives, LCD panels, memory modules, and all the rest (except CPUs, apparently) seem to be made in China or at least have many of their innards made there. When Sweetheart Cup Co. can save 40% by sourcing paper cups from Shenzhen, China, rather than India, it’s a safe bet that the tech industry does or soon will follow suit. So you can’t blame the “Made in China” label, because we see far more good product than bad bearing it.

In fact, there’s really only one thing we can do. Assuming that most computing equipment gets made in China, then we have to look at the issue of oversight. Who is watching the manufacturers? This gets tricky since, honestly, I would rather have a Taiwanese vendor responsible for production than an American one. Taiwanese companies will send representatives to China who speak the language, know the cultural nuances, and understand the fundamental needs of the mainland managers. We Americans step in with our bad accents and Big Macs and are just as liable to get shined on as shown blank stares. Only companies with the resources of an Intel or IBM are able to surpass this barrier.

I have always preferred the performance and stability of boards from the likes of ASUS or Gigabyte. Now, after talks with company insiders from several Asian vendors, I better understand why such companies have their sterling track records. When I skeptically prodded AMD about having an ECS motherboard on its stable platform program, reps nodded with understanding but assured me that the model in the AVS lineup has been flawless. Not coincidentally, I recently learned that ECS’s mainland China factories are ISO 9001:2000 and ISO 14001:2004 certified.

I can’t give you a list of PC component vendors with the tightest Taiwan-China relationships any more than I can assure you which are the “best” Taiwanese companies to buy from. All I can suggest is that you do your homework, attend the industry events, and interrogate vendor reps face-to-face about their Chinese manufacturing practices. My guess is that the ones you want to buy from will be the ones who took the effort to make sure you could speak comfortably with the person you’re questioning and take home collateral written in perfect English.