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Pssst. China Has Quality Control Laws. Et Tu Hugo?

By Dan Harris and Steve Dickinson

A China Daily article, entitled Foreign luxury retail brands fail quality control test: study, (h/t Quality Inspection Blog) 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 (all?) of you are murmuring, "of course," but bear with me here. I can cite you example after example where companies and individuals 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 and then ordered "to be withdrawn from sale."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."

What happened? 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. Here goes: 1. I am going to have to be incredibly vague here, but we had a client, fairly well known company too, that spent millions 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 had simply never occurred to the company that China might require the same sort of proof. It went through full on testing of this item in China and eventually it was able to open the factory, nearly a year later. 2. I every so often get calls from doctors, dentists, and architects, with plans 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 even occurred to them that they might need a license to practice their craft in China and they then ask me what it takes to secure one. I then say that I am not even certain a license is required, but I just assume that it is and that I do not know what it takes, but would be happy to research it for them. Since none of these people ever hired my firm for this research, I still do not know if a license is required, but I still assume that it is. 3. Many years ago, I was involved in a dispute involving millions of dollars in bad fish product. And when I say millions of dollars, I mean millions of dollars for the bad product itself, which had value as pet food. The product was eventually shipped to China where it was rejected. I later asked the party that had shipped the product to China why it had shipped it there as human food, rather than as pet food and the response was that they did not know China conducted food inspections. 4. Company shipped product (and again I have to be vague here) to China where it was rejected as not being "strong enough" (and I am being vague here too). The company had shipped its product to about ten countries in the past and maybe two of them had strength requirements similar to China's. Company just assumed China's strength requirements would not be on the "high end" and so had never even bothered to check. Company assumed wrong and 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.

Full post as published by China Law Blog on March 16, 2010 (boomark / email).