Book review: Poorly Made in China – An insider’s account of the tactics behind China’s production game. (By Paul Midler, 2009)

Midler is a Mandarin-speaking MBA that has spend some years working as an intermediary between American importers and Chinese manufacturers in China. In fact, he calls China home. His account of what takes place between the American importers and the Chinese manufacturers is informative, nuanced, somewhat humorous, and (in my opinion) balanced. He discusses the complexity of this relationship and who the real losers are: the American consumers.

The manufacturers will do anything to get contracts; after securing contracts, they do anything to increase their profit margins, even if it is at the expense of quality. The importers are aware of this, but turn a blind eye. They import goods that have quality flaws, with unknown effects on the consumers. The consumers buy these products not knowing that quality controls do not exist and ignorant of the fact that these products might cause serious health issues (think of shampoos, soaps, etc.).

Midler describes how the relationship between the manufacturers and importers change with time. It begins with the manufacturers pleasing the importers to get contracts; but as time goes on, the tables are turned and the importers find themselves at the mercy of the manufacturers and the Chinese suppliers win in the long term. He says that the tactics are “straight out of Sunzi’s The Art of War, and it only occurred to importers much later – if it occurred to them at all – that their suppliers knew from the very start where they planned to be at the endgame.”

Midler says, “The manufacturer-importer relationship can be seen as an allegory for the future of relations between the United States and China…. Some leaders may feel that they have only the political past to use as a guide; but in fact, they have many microcosmic examples to take from business, and in these models can be found an appreciation for a variety of strategies and tactics.”

I highly recommend this book. We often hear sound bites that are not linked to the big picture from our politicians or pundits. Midler’s on the ground account is really key to understanding this incredible economic dynamic between the U.S. and China, which has lead to incredible growth in Chinese manufacturing, while decimating the American one.

Armineh Noravian