News that New Zealand's government is investigating clothing imports from China, including children's pajamas, after some were found to contain dangerous levels of formaldehyde is only the latest incident that has raised concerns about the safety of Chinese exports. About a month ago, I had a brief E-mail chat with Simon Anholt, a British government adviser specializing in the field of nation branding, about the impact of these product safety issues on the Chinese economy.
How dangerous are these quality issues to China's effort to create a powerful global brand that, I assume, would represent quality, as well as its emergence as a power in the global economy?
If they are serious, frequent, and widely reported, then they will have some effect on slowing down China's rise to credibility as a producer of goods. But unless it's continuous and catastrophic, it won't have a major effect. China is still on track to achieve the same global manufacturing reputation as Japan in around a quarter of the time Japan took to achieve it. My prediction? Within the next five years, we will start to see U.S. and European manufacturers adopting fake Chinese-sounding names for their new brands in order to make them sound more modern, more glamorous, and more desirable to consumers.
What steps should China take to ensure that it is not known as merely an assembler of products, and perhaps a poor one at that?
It should continue to do exactly what it is doing: Improve the quality, improve the design, ramp up the innovation. Build new global brands, and buy existing ones.
A CapCom shout-out. Namaste! A big thanks to some great bloggers who have been kind enough to mention or link to some of my recent posts: Instapundit, Jonah Goldberg, Ed Driscoll, ElephantBiz, BrothersJudd, Wizbang, Daniel Drezner, Greg Mankiw, Everyday Economist, Say Anything, and QandO.