Original Significance of ‘Origin’ Label to ‘Quality’ Label
‘Made in XXXX’ is now a label required on almost all products or at least on the products’ packaging. This is required by law for many reasons such as for import inspection and determining duties or tariffs. From business marketing point of view, this label identifying the origin of manufacturer gives consumers additional information to compare similar products made in different places. This ‘origin’ label gives the manufacturer a sense of accountability and an incentive to produce high quality products so that the ‘origin’ will be associated with ‘high quality’. For example, Made in U.S.A. has been recognized as high quality label with many machinery and electronic products such as tractors, trucks, refrigerators, washing machines, television sets, etc. Competitors from another origin must work very hard to produce higher quality products to earn the consumers’ recognition.
History (1950’s to 1980’s) has shown us, ‘Made in Japan’ was initially associated with inferior ‘copycat’ of many products made in U.S.A. until the Japanese products became better and better in quality and more competitive in prices. One can easily recall some electronic products like hi-fi’s and television sets; eventually the Japanese producer such as Sony with ‘origin’ label, ‘Made in Japan’, edged out RCA, ‘Made in U.S.A.’. When the Asian four little dragons rose in manufacturing competing with American, European and Japanese products, the ‘origin’ label had not only the above described legal significance (such as duties and tariffs) but also adding the ‘quality’ significance similar to brand names do. It took a while for products ‘Made in Taiwan’ to be recognized as high quality and competitive in prices after many food products, sports equipment as well as electronic appliances gained world acceptance to view ‘Made in Taiwan’ as ‘high quality and price competitive’. Of course, Mainland China was following the competitive footsteps, except she succeeded far more rapidly and across broadly in many manufacturing domains. The U.S. ought to be concerned, but protectionism is not the solution or replacement of enhancing competition!
Blurred Significance of ‘Origin’ Label under Globalization and World Harmony
As the world is progressing into globalization, the world economy dictates more global collaboration in goods manufacturing for several rational reasons: 1. Conserving materials and energy, 2. Leveraging capital, technology and human talents, 3. Optimizing efficiency in transportation and distribution of goods to markets. Thus, a final product may have materials and components made in several different origins, manufactured and assembled in different geographical locations and distributed and packaged for different markets. This means that a single product may contain numerous ‘origin’ labels in its content. Naturally, the significance of ‘origin’ label is diminished somewhat or blurred in ‘origin’, ‘quality’ and ‘competitiveness’ except their original ‘legal’ reason for determining duties and taxation.
Globalization has worked well for human societies by recognizing that capital is liquid and mobile and cooperation can maximize gain. Collaboration among countries especially under international corporations can increase efficiency and reduce redundancy in all levels of production, re-manufacturing, distribution and marketing from raw resources converting to basic material elements, mass production of common components, specific parts manufacturing and final assembly and packaging. The entire process of production to sales also can be selectively designed and located near the source material or skill labor locations or energy supply points or factory facility or market size/sites and/or end users distribution all based on optimization of economical value (which will benefit consumers and conserve resources and energy) and depended on what kind of products are made for what kind of users (which may dictate what sales channels and distribution mechanism to be employed). Therefore under Globalization, the significance of ‘Origin’ label seems to be blurred but actually being very essential (visible but often hidden) for production efficiency, assuring ‘quality’ and ‘price competitiveness’.
New Significance of ‘Origin’ Label Under Political Not Economic Consideration
Ever since the U.S. turning her concern for trade competition into a hostile trade war with all her competitors by applying protectionism under the name of national security, the globalism and world harmony broke loose. The U.S. unilaterally started tariff war and forced new round of bilateral trade agreement negotiation with Japan, Korea, Canada, Mexico, European countries, China etc., China being the world’s second largest economy closely behind the U.S. The U.S. objected China’s “China Manufacture 2025” program to elevate her manufacturing technologies to become more competitive. Protectionism originates from the fact that some small and weak countries can’t survive competition in trade in a free market economy. The large economies sometimes tolerated those protectionism practiced by underdeveloped countries for a while, but in reality, protectionism only invites retaliating protectionism eventually forcing parties to develop a mutually acceptable trade agreement. Trade agreements are essential for economic activities and prosperity of the globe.
Since Trump’s Administration, the U.S. for the first time applied stringent protectionism against the whole world at the same time and fiercely targeted at China in particular. In addition to a politically motivated trade war, the U.S. started a technology war against China by banning her world famous employed-owned telecommunication company, Huawei, to sell its advanced and superior fifth generation (5G) internet and telecommunication equipment in the U.S. and by prohibiting U.S. technology companies to sell any product ‘Made in U.S.A.’ Including foreign products containing US made IC and silicon components to Huawei. This makes the ‘origin’ label taking on a ‘New Significance’ but an ominous one. This policy is the extreme of protectionism motivated by political not economic consideration. It no doubt will escalate the already tense U.S. -China trade relations to a higher level making a drastic negative impact not only on the Chinese and US economy but also on the world economy.
The current administration (DPP party) in Taiwan has been hyping up its anti-China sentiments driven by DPP’s desire to make Taiwan independent of China. The present leader, Tsai Ing-wen, seemed to be emboldened by her recent election victory by embracing the American tune of anti-China and willingly to be an US chess piece in the US-China confrontation. Taiwan issued a politically motivated regulation that will prohibit any telecommunication terminal devices having label or language of ‘Taiwan, China’ to be sold in Taiwan. This regulation clearly targets Huawei’s products, like cell phones etc. and many other Chinese products. Sure enough, this unwise political move invited a retaliation from Mainland China by her issuing a regulation that requires all products importing to China from Taiwan to be properly labeled as ‘Made in Taiwan, China’ otherwise embargoed. This new ‘origin’ label essentially is equivalent to a sanction of all ‘Made in Taiwan’ products, nearly 30% of Taiwan’s exports. If the Taiwan manufacturers do not comply, a devastating blow to Taiwan’s economy will occur!
This new significance of ‘origin’ label can be easily administered and will have a huge impact on Taiwan’s future – a choice of accepting a peaceful and prosperous coexistence or a diminishing Taiwan economy pretending to be independent of China. Obviously, the latter road is undesirable from Taiwan citizen’s point of view. The politicians in Taiwan should wise up and abandon their foolish and senseless quest to cut ties with Taiwan's motherland and her 1.4 billion people of the same culture, language, hair and skin color, cuisines and closest DNA.
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