Manufacturers seek to raise US worth, profile

Traditionally anonymous Chinese manufacturers are now setting up shop in the United States in an effort to raise their brand and presence, and climb the value chain, as Zheng Yangpeng reports from New York.

It is a universally acknowledged truth that Chinese products are so ubiquitous in the West that an ordinary US consumer would find it very difficult to live a day without any product "made in China".

What is less known is the pain that plagued a typical Chinese manufacturer for years: Despite widespread popularity, the quality of their goods is much less recognized, and only a minor part of the value created goes into their pockets.

Of course, few of them would like to succumb to that position. Many Chinese manufacturers are relentlessly improving their quality and climbing up the value chain. Some are actively seeking acquisitions around the globe.

Traditional exporters, while maintaining their factories back home, also begin to establish stores in developed markets like the US to improve their visibility and try to build something that they traditionally lack: a brand.

It is a tall order. Developed markets, unlike developing ones, have no shortage of established brands, which take years to cultivate. Chinese exporters, who traditionally indulge in factories rather than showrooms, are not accustomed to dealing with foreign customers. Some even acknowledge that when they are doing original equipment manufacturer business in China, they even don't know to whom their products are sold.

"We used to be the peasants plowing in the mud field. Now we have to put on our suits and be salesmen," said Kobe Zhang, vice-president of a Guangdong-based audio equipment maker who is now doing business in California, when describing the hardship of transforming his role.

"But why do you want to come here, rather than making things at home?" I asked.

"Our sales in past years increased, but profits dropped significantly. We'll die if we don't expand. We have no choice," he said.

Manufacturing ceiling

For many other manufacturers, Zhang's words are truth to them as well.

"Why are we so tired? It is because we don't have high-enough standards. Domestic competition, to put it frankly, is a competition over price," said Li Deqing, general manager of an automatic-door manufacturer.

"The reality is, no matter how bad the products are, they can be sold; no matter how good the products are, they cannot be sold at a good price," he said, becoming emotional.

Cao Yuejin, president of Taotao Inc, an all-terrain vehicle maker and exporter, feels as strongly as Zhang. He gets outraged as he recalls when inferior ATVs that his peers sold in Dubai, the United Arab Emirates, ruined the reputation of Chinese ATVs in that part of the world.

"The products were really terrible," he said angrily. "Since then, I could not expand my business in the Middle East."

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