The world needs innovating nations as China’s faulty manufacturing is now in the open.
No better place than India to begin with.
In some management schools across the world, as a lesson on faulty business practices, a story is often told.
Adjacent to a road once, long and often used, a man ran a tyre repair business out of a small shop. A little before his shop, on both sides of the road, every morning, he used to drop sharp nails, good enough to pierce a tyre and render it useless. The drivers, unable to drive further, used to end up at his shop, thus becoming unwilling consumers to buy a product they did not need in the first place.
However, the owner had some rudimentary mechanical skills as well. In lieu of a small commission from two men running a gas station each, few miles down the road, he used to damage the fuel tanks of the cars that came in for repair. Thus, a few miles later, most drivers would then become unwilling customers for the gas station.
The three thugs disguising themselves as entrepreneurs thus made significant money at the cost of gullible drivers who were unable to understand what was causing their cars to break down on one or two occasions. The man owning the tyre repair shop, one can assume, must have been a fan of Chinese President Xi Jinping.
If the story above is mirrored to the global economy today, the tyre repair shop would closely resemble China, and the gas station would be the thousands of Chinese factories, companies and enterprises that have the backing of the state.
After ushering an information blockade between late 2019 and early 2020, as the tyre repairman did with this nails, the Chinese have unleashed, knowingly or unknowingly (to be polite), a virus that has stalled the global economy and paralysed healthcare systems across the world, especially in the United States of America and Europe.
In the global story, this thug is China. Already infamous for their dumping practices, cheap products made in factories where human rights are a rare quality, and the ability to mobilise supply by artificially aggravating the demand, China embarked on ‘mask diplomacy’ in Europe to counter the outbreak.
Many nations, thus, ended up being like those gullible drivers, tricked into buying faulty testing kits, personal protection equipment (PPE), and masks, and some even ended up paying for the equipment they had donated as a gesture of goodwill to China in the first place.
Reports from Spain about Chinese testing kits that had only 30 per cent sensitivity against the required 80 per cent sensitivity, therefore detecting only 30 per cent of the positive cases. Spain returned close to 50,000 faulty test kits to China, eventually.
Czech Republic was also the beneficiary of a similar export experiment. As per newspapers there, 80 per cent of the 150,000 kits delivered turned out to be faulty. Some of those kits only worked if the patient had been infected for five days. The nation was counting on these kits as they could produce results in 10-15 minutes. However, realising the folly of the Chinese, they went back to conventional testing systems.
Slovakia, a landlocked nation in Central Europe with a population of one-fourth of Delhi was not spared either. The nation $16 million on 1.2 Chinese antibody tests. However, the tests turned out to be inaccurate and could not detect the virus in its early stages. A frustrated Prime Minister remarked that the kits had greater utility if dumped in a river.
Turkey also faced similar challenges with the testing kits imported from China, sourced from the same company that supplied to Spain. However, Turkey went on to 350,000 kits from another Chinese supplier.
It turns out, even allowing Huawei within the country is no guarantee for quality for a government trying to curb the outbreak. Of the 17.5 million home antibody testing kits from China, the government of the United Kingdom that close to half of them failed to detect the positive cases. The government had ordered these kits in the hope of conducting 250,000 tests on a daily basis.
Officials in the Netherlands complained about the faulty masks, saying they could not even cover the entire face or had defective filters. This led to the officials having to recall thousands of masks that had already been supplied to the hospitals around 21 March. The Dutch had purchased 600,000 masks from China.
Other nations that voiced similar concerns include Georgia, Malaysia, and Finland. However, the cruelest joke was on Italy as its government ended up for buying back the kits they had donated to China in the first place after the outbreak in Wuhan.
In early April, the Australian Border Force confiscated around 800,000 defective face masks it had purchased from China for about $7.6 million. This was due to a viral video where a Chinese worker was seen rubbing the masks on his shoe. It turns out, China was also over-charging for these masks, perhaps for the efforts that had gone into rubbing each of those masks on different shoes.
In India, the experience has been somewhat similar as well. While there were unconfirmed reports a week ago of more than 60,000 kits turning out to be faulty, the spokesperson of the Ministry of External Affairs (MEA) downplayed the issue, stating that the Indian Council of Medical Research (ICMR) was looking into it.
India, like other European nations, is continuing the import of medical equipment from China.
In the same statement, the spokesperson for MEA stated that 24 flights, in the last two weeks, had left for India from five Chinese cities carrying 400 tonnes of medical supplies which included RTPCR test kits, rapid antibody tests, PPE kits, and so on.
More flights are expected to arrive in the coming weeks as India ramps up its capacity to tackle the outbreak once the lockdown is lifted.
So, what’s inspiring the factories and enterprises in China to act like one of those thugs from the story?
Firstly, many of them are merely Chinese middlemen looking to exploit the crisis in the West. Promising a few million masks to countries that are struggling to curb the outbreak, these middlemen are making merry at the cost of faulty equipment. These include people who ventured into the business of medical equipment sensing a quick buck, without an iota of understanding of the quality measures required.
Two, many companies in China, looking to cover up for the weak domestic demand, have taken to manufacturing masks and other medical equipment.
However, unlike cheap exploding phones or faulty Christmas lights, such equipment warrants quality, given there are lives that are dependent on their working. Yet, most manufacturers have no understanding of these issues.
What they do have is the backing of the Chinese government in the form of cheap credit. As Australia discovered through a viral video, most of these new factories have no standards in place for the hygiene of workers.
China’s officials have been on a face-saving spree since reports of the faulty kits emerged.
Late March, Indian Council of Medical Research , addressing the issue, that the exporters of all essential medical equipment would be required to show that they are certified in China and that their products meet the quality standards of the nation importing them.
On 6 April, China’s customs authorities that they had confiscated more than 11 million unregistered medical products in the previous week. These included 9.94 million masks, 144,000 protective gowns, one million testing kits, and around 24,000 infrared thermometers.
Despite the faults in their mask diplomacy, China will be remembered for rising to the occasion at a point when nations in Europe were failing to make sense of the outbreak.
Not the US, but it was China who was the to answer Italy’s call for emergency medical supplies. It had publicly committed to sending 1,000 ventilators, two million masks, 100,000 respirators, 20,000 protective suits, and 50,000 testing kits before 20 March itself.
The nation has also been on a ventilator building spree. Factories in the mainland were working overtime to supply ventilators to the US and Europe, even though President Donald Trump has been highly critical of China for choosing not to share crucial information about the outbreak in January itself.
The story of the three thugs does not end there, however.
Eventually, a fourth business owner, with an intent to transform the world, comes up with a store for tubeless tyres on the same road. Thus, drivers are saved from the pain of paying for a punctured tyre routinely. He is joined by another owner who is innovating with electric vehicles, rendering the gas stations useless. The thugs, eventually, lose. The innovators win.
The world needs such innovating nations too, for the fallacy of Chinese manufacturing is now in the open. It’s time to diversify the supply chains, production, and for companies of the West to explore new avenues for the manufacturing of quality products at affordable prices.
No better place than India to begin with, obviously.