Premier says nation's technology less competitive on global market

Premier Li Keqiang called for promoting the quality of Chinese products to help set off the side effects of decelerating economic growth.

He made the remark at the China Quality Conference on Monday, the first meeting of its kind held in China.

His call followed a National Bureau of Statistics report over the weekend that value-added industrial output - a major indicator of the condition of China's economy - expanded by 6.9 percent year-on-year in August, the slowest pace in six years. The slowdown has prompted concerns that the world's second-largest economy is losing steam.

At Monday's conference, Li said that the miracle of the Chinese economy has to rely more on the improvement of quality, instead of speed, as the country is losing its traditional advantages to support economic growth.

"Our economic structure is far from balanced, and our innovation and high technology are often less competitive on the global market. So we have to put quality management in a more important position as we strive toward economic upgrading," Li said.

"In other words, if quality cannot be ensured, our economy will lose the support of further growth."

Li emphasized the essential role of companies in quality management and the need for less government intervention to give companies the freedom to decide what to produce. He also stressed the importance of developing a pool of educated laborers and a compulsory recall system.

Worries are mounting that the world's factory is losing its competitiveness to Southeast Asia and Latin America because of the rising costs of labor and materials.

A string of quality scandals has dented consumer confidence in Chinese products and brands.

In a recent case, Shanghai Husi Food, a supplier for a number of global brands such as McDonald's, KFC, Pizza Hut and Starbucks, was found to have used expired meat as well as forged production dates to extend shelf time.

Carlos Gutierrez, former US secretary of commerce, echoed Li's view that the main responsibility for the improvement of products and services lies with companies.

"It means that the whole company, every employee, needs to know that quality is the key of products," Gutierrez said at the conference.

Gutierrez said that enterprises should establish a system that allows workers to report defects.

"We have to give the workers the confidence that if they see a problem in a product they can bring it forward. That makes a great company," he said.

Quality is also crucial to transforming China's export-led economy to one led by consumption and innovation, he said.

Zhou Ji, president of the Chinese Academy of Engineering, said quality management is key to improving the manufacturing sector, one of the major drivers of economic growth.

He noted that major quality problems in the manufacturing sector include a high reject ratio of products, low reliability of key parts and lack of name brands.

"The quality improvement of made-in-China products is lagging behind the expansion of the economy. If China wants to build a strong manufacturing sector, it must start from the quality management of products," he said.

To improve the quality of products, the country needs to encourage enterprises to build a top-to-bottom quality management system and encourage the development of name brands, he said.

Contact the writers at zhaoyinan@chinadaily.com.cn and xuwei@chinadaily.com.cn

(China Daily USA 09/16/2014 page1)