A China Daily article, Foreign luxury retail brands fail quality control test: study,, nicely highlights what Westerners far too often fail to realize about China: it has laws. More specifically, it has import laws and quality control/consumer protection laws.
Now I know most of you are murmuring, “of course,” but bear with me here. I can cite you example after example where companies have completely failed to account for this.
But first, more on the China Daily article.
The article is on how clothes from well-known luxury goods makers like Hermes, Versace, Dolce & Gabbana, Paul & Shark, Trussardi and Hugo Boss were “proven to be substandard in a routine quality control test.” and then ordered “to be withdrawn from sale.” These garments “were manufactured in Italy, Morocco, Korea, France, Turkey, Vietnam and India before being imported into China” and “covered a range of attire, from jeans and T-shirts to sweaters, skirts and suits:”
Defects in the manufacturing included poor color fastness, unacceptable amounts of acid and high levels of formaldehyde, which can cause skin rashes, eye irritations, allergies, respiratory problems and even cancer, the report warned.
Another fault uncovered by the test included improper labeling. In response to this claim, Cao Lei, a communication director with Hermes in China, said:”Zhejiang administration took the samples in December 2009 and we were informed of the results in January 2010. It is undeniable that we have made some mistakes in labeling and we have started to correct all of the labels on the mainland, which will be finished by the end of March.”
I do not know what happened here, but I can tell you about other instances of which I am aware and the answer is complete inattention.
1. I am going to have to be incredibly vague here, but the China business lawyers at my firm were working with a well-known U.S. company that spent millions of dollars building a factory in China, only to be told that it could not import an item absolutely critical for manufacturing its final product. It had taken this company a year and lots of money to prove the safety of this item to the United States Environmental Protection agency, but for some reason, it never occurred to the company that China might require the same sort of proof. It went through testing of this item in China and eventually it was able to open the factory, nearly a year later.
2. Our China lawyers every so often get calls from doctors, dentists, and architects who plan to go to China to practice for a while, oftentimes in quasi-retirement. I ask them whether they are licensed in China and there is always a long pause. They then say that it never occurred to them that they might need a license to practice their craft in China.
3. Many years ago, a couple of my law firm’s international litigators represented a British company that had paid millions of dollars from a Russian company and received really bad fish product. Unable to sell the fish in England, the British company eventually shipped it all to China where it was refused entry as unfit for human consumption. I asked the British company why it had shipped the product to China and they said it was because they did not know China conducted food inspections.
4. Company shipped a product (I have to be really vague here) to China where it was rejected as not being “strong enough” (and I am being vague here too). The company just assumed China’s strength requirements would not be on the “low end” and had never even bothered to check. Company assumed wrong and its product was rejected.
Bottom Line: China has import laws, quality standards, and licensing requirements and you should know what those are before you ship or manufacturer your goods or go there as a service provider.