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ASIAINSPECTION Q4 BAROMETER 
CHINA FOOD SCANDALS 
HIT NEW HIGHS
HONG KONG, OCTOBER 8, 2014 
ASIAINSPECTION (AI) 
ASIAINSPECTION (AI), A LEADING QUALITY CONTROL SERVICE PROVIDER 
THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD 
TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN, 
today announces its 2014 Q4 Barometer, a quarterly synopsis 
on outsourced manufacturing and the quality control services industry.
Several food scandals in China over the past quarter 
have placed pressure on brands to improve their food safety standards. 
CHINA STRUCK 
BY FOOD SAFETY FEARS 
THE LARGEST SCANDAL INVOLVED EXPIRED MEAT 
being sold to & .1
This risk is translating to increased orders for food inspections, 
which jumped 
according to AsiaFoodInspection (AFI) data, AI’s food quality control services arm. 
vs. the previous quarter year over year 
21.3% 30% 
In another incident, police seized 
30,000 tonnes of chicken feet that had been soaked in hydrogen peroxide, ² 
and in September a gang was arrested 
for having sold over 90 MILLION toxic gelatine pill capsules.³
The long term solution is stricter government regulations 
and food inspections and testing at the source. 
IT’S COMPLETELY UNACCEPTABLE 
for Chinese manufactured food to routinely put consumers at risk, 
“ 
“ 
said Sebastien Breteau, AsiaInspection CEO. 
AFI figures show that 51.7% of food inspections 
conducted between Q1 and Q3 2014 in mainland China have failed.
China’s Food Safety Law is currently being re-drafted. 
Liability and penalties have been increased significantly 
and it will place the burden of proof on the manufacturer to prove 
that its food was compliant with food safety standards. 
The new system will also motivate consumers to be more proactive 
in coming forward with a monetary reward system for whistleblowers. 4
CHINA EMPHASIZES 
HIGH-TECH CAPABILITIES 
India’s campaign, which seeks to boost high tech manufacturing, 
has not offered specifics on incentives. 
China has responded to the September launch of India’s ‘Make in India’ campaign 
with a government backed ‘Made in China’ campaign. 
VS 
Source: The India Post
The Chinese campaign is offering 
tax breaks 
to manufacturing companies 
to upgrade their machinery, 
in addition to tax reductions 
on imports of high tech equipment 
for key industries such as electronics.
China’s electronics manufacturing sector is mature but standards are mixed, 
with AI data showing that in Q3 2014, 
of electronics inspections were beyond AQL (Acceptable Quality Level) 
24.5% 
comparable to India, at 27.8%
ETHICAL AUDITS CAST LIGHT 
ON UNSAFE WORKING CONDITIONS 
Ethical Audits are a continued focus with China 
responding by imposing stricter punishments 
for poor conditions that violate their Workplace Safety Law. 
as well as 
wage garnishments for managers of 
UP TO 80%. 5 
These include fines of 
OVER $3.2 MILLION USD 
for serious workplace incidents
Ethical audits conducted by AI 
in China have had a 26.4% critical failure rate so far this year, 
an increase over 22.9% in 2013. 
That figure is close to India at 28.6% 
AI data shows that 
Hygiene, Health and Safety, followed by Working Hours, Wages and Benefits, 
ARE THE MOST COMMON CAUSES FOR FAILURE 
of ethical audits in China.
MYANMAR GAINS 
50,000 GARMENT WORKERS 
Following recent economic liberalization in Myanmar, 
AI has started seeing increased demand for inspections there in Q3 2014, 
primarily in the textile and apparel industry. 
Myanmar now seems to be a viable option for buyers looking to mitigate 
rising costs in China with a "China +1" sourcing strategy. 
Daily wages in Myanmar are estimated at $1.10 per day, compared with 
$2.50 
in Vietnam 
$18 
in China 
$2.80 
in Bangladesh
The Myanmar government is ramping up support 
with the Ministry of Border Affairs (MBA) by running a program to 
TRAIN 50,000 GARMENT WORKERS 
which has already successfully placed 20,000 in jobs.6
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says that 
OVER 200 FACTORIES IN BANGLADESH HAVE BEEN SHUT DOWN 
since the collapse of Rana Plaza last year, 
costing millions in export revenue and thousands of jobs.7 
The trend is likely to continue until standards improve. 
BANGLADESH EXPORTS GROW 
DESPITE FACTORY CLOSURES
Exports from the country grew by 13% 
year-on-year between January and May, 
AI data shows that while we saw a rise in audits performed, 
38.7% OF MANUFACTURING AND 16.4% OF ETHICAL AUDITS HAVE FAILED 
so far this year in Bangladesh, whereas 23.9% and 11.1% failed in 2013, respectively. 
with over 66% of exports 
going to Europe and the United States.8
A LEADING QUALITY CONTROL SERVICE PROVIDER 
that partners with international Brands, Retailers and Importers 
to secure and manage their global supply chain. 
ABOUT ASIAINSPECTION 
YOUR EYES IN THE FACTORY!™
With unique web-based quality control management, 
AI OFFERS PRODUCT INSPECTION, FACTORY AUDIT 
& LABORATORY TESTING SERVICES 
for more than 3,000 clients worldwide.
DEDICATED ACCOUNT MANAGER 
A supply chain partner 
offering advice on your specific needs 
COMPREHENSIVE ONLINE MANAGEMENT 
Use your real-time dashboard 
to benchmark and identify 
your high performing suppliers 
PRODUCT EXPERTISE 
Hundreds of off-the-shelf customizable 
product specific checklists 
MOBILE 
Book, check reports 
and make decisions on the go 
INDUSTRY LEADING TURNAROUND 
Onsite within 48 hours. 
Reports the same day 80% of the time 
FLEXIBLE 
Cancel or modify orders up to 4pm 
the day before the inspection for free 
TRUSTED AND TRULY INDEPENDENT 
100% QC. AI is not involved in sourcing 
and protects your factory information 
ALL-INCLUSIVE PRICING 
Easy to budget. No hidden costs 
ABOUT ASIAINSPECTION 
YOUR EYES IN THE FACTORY™
TWITTER.COM/ASIAINSPECTION 
FACEBOOK.COM/ASIAINSPECTION 
LINKEDIN.COM/COMPANY/ASIAINSPECTION 
WWW. A SI A INSPECT ION. COM 
PRESS CONTACT 
MICHAEL MES ARCH • Tel: (+86) 755 2223 9888 
Email: press@asiainspection.com
1/ Forbes. Queasy Reading: Shanghai Gov’t Shuts Down McDonald’s, KFC Meat Supplier. July 21st, 2014. 
http://www.forbes.com/sites/russellflannery/2014/07/21/queasy-reading-shanghai-govt-shuts-down-mcdonalds-kfc- 
meat-supplier/? 
2/ Reuters. China police seize 30,000 tonnes of tainted chicken feet. August 26th, 2014. 
http://www.reuters.com/article/2014/08/26/us-china-foodsafety-idUSKBN0GQ0O720140826 
3/ China Daily. Police bust gang selling toxic gelatin pill capsules. September 4th, 2014. 
http://www.chinadaily.com.cn/china/2014-09/04/content_18544268.htm 
4/ China Law Insight. Revised Amendment to the PRC Food Safety Law. July 28th, 2014. 
http://www.chinalawinsight.com/2014/07/articles/compliance/revised-amendment-to-the-prc-food-safety-law/ 
5/ Lexology. Harsher personal and corporate penalties for work safety accidents in China. September 12th, 2014. 
http://www.lexology.com/library/detail.aspx?g=c58eba21-3271-4bd3-85b6-aae4b12cca0d 
6/ Myanmar Business Today. MGMA to Provide Jobs for 30,000 Garment Workers. September 16th, 2014. 
http://www.mmbiztoday.com/articles/mgma-provide-jobs-30000-garment-workers?utm 
7/ Yahoo News. Garment industry says 200 plants shut since Bangladesh disaster. September 11th, 2014. 
https://news.yahoo.com/garment-industry-says-200-plants-shut-since-bangladesh-112755529.html 
8/ Fibre2Fashion. Bangladesh global apparel export share to go up 1% by 2020. September 22nd, 2014. 
http://www.fibre2fashion.com/news/company-reports-news/newsdetails.aspx?news_id=167780&utm 
FOOTNOTES

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Q4 Barometer: China Food Scandals Hit New Highs; Bangladesh Exports Grow Despite Closures

  • 1. ASIAINSPECTION Q4 BAROMETER CHINA FOOD SCANDALS HIT NEW HIGHS
  • 2. HONG KONG, OCTOBER 8, 2014 ASIAINSPECTION (AI) ASIAINSPECTION (AI), A LEADING QUALITY CONTROL SERVICE PROVIDER THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN, today announces its 2014 Q4 Barometer, a quarterly synopsis on outsourced manufacturing and the quality control services industry.
  • 3. Several food scandals in China over the past quarter have placed pressure on brands to improve their food safety standards. CHINA STRUCK BY FOOD SAFETY FEARS THE LARGEST SCANDAL INVOLVED EXPIRED MEAT being sold to & .1
  • 4. This risk is translating to increased orders for food inspections, which jumped according to AsiaFoodInspection (AFI) data, AI’s food quality control services arm. vs. the previous quarter year over year 21.3% 30% In another incident, police seized 30,000 tonnes of chicken feet that had been soaked in hydrogen peroxide, ² and in September a gang was arrested for having sold over 90 MILLION toxic gelatine pill capsules.³
  • 5. The long term solution is stricter government regulations and food inspections and testing at the source. IT’S COMPLETELY UNACCEPTABLE for Chinese manufactured food to routinely put consumers at risk, “ “ said Sebastien Breteau, AsiaInspection CEO. AFI figures show that 51.7% of food inspections conducted between Q1 and Q3 2014 in mainland China have failed.
  • 6. China’s Food Safety Law is currently being re-drafted. Liability and penalties have been increased significantly and it will place the burden of proof on the manufacturer to prove that its food was compliant with food safety standards. The new system will also motivate consumers to be more proactive in coming forward with a monetary reward system for whistleblowers. 4
  • 7. CHINA EMPHASIZES HIGH-TECH CAPABILITIES India’s campaign, which seeks to boost high tech manufacturing, has not offered specifics on incentives. China has responded to the September launch of India’s ‘Make in India’ campaign with a government backed ‘Made in China’ campaign. VS Source: The India Post
  • 8. The Chinese campaign is offering tax breaks to manufacturing companies to upgrade their machinery, in addition to tax reductions on imports of high tech equipment for key industries such as electronics.
  • 9. China’s electronics manufacturing sector is mature but standards are mixed, with AI data showing that in Q3 2014, of electronics inspections were beyond AQL (Acceptable Quality Level) 24.5% comparable to India, at 27.8%
  • 10. ETHICAL AUDITS CAST LIGHT ON UNSAFE WORKING CONDITIONS Ethical Audits are a continued focus with China responding by imposing stricter punishments for poor conditions that violate their Workplace Safety Law. as well as wage garnishments for managers of UP TO 80%. 5 These include fines of OVER $3.2 MILLION USD for serious workplace incidents
  • 11. Ethical audits conducted by AI in China have had a 26.4% critical failure rate so far this year, an increase over 22.9% in 2013. That figure is close to India at 28.6% AI data shows that Hygiene, Health and Safety, followed by Working Hours, Wages and Benefits, ARE THE MOST COMMON CAUSES FOR FAILURE of ethical audits in China.
  • 12. MYANMAR GAINS 50,000 GARMENT WORKERS Following recent economic liberalization in Myanmar, AI has started seeing increased demand for inspections there in Q3 2014, primarily in the textile and apparel industry. Myanmar now seems to be a viable option for buyers looking to mitigate rising costs in China with a "China +1" sourcing strategy. Daily wages in Myanmar are estimated at $1.10 per day, compared with $2.50 in Vietnam $18 in China $2.80 in Bangladesh
  • 13. The Myanmar government is ramping up support with the Ministry of Border Affairs (MBA) by running a program to TRAIN 50,000 GARMENT WORKERS which has already successfully placed 20,000 in jobs.6
  • 14. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says that OVER 200 FACTORIES IN BANGLADESH HAVE BEEN SHUT DOWN since the collapse of Rana Plaza last year, costing millions in export revenue and thousands of jobs.7 The trend is likely to continue until standards improve. BANGLADESH EXPORTS GROW DESPITE FACTORY CLOSURES
  • 15. Exports from the country grew by 13% year-on-year between January and May, AI data shows that while we saw a rise in audits performed, 38.7% OF MANUFACTURING AND 16.4% OF ETHICAL AUDITS HAVE FAILED so far this year in Bangladesh, whereas 23.9% and 11.1% failed in 2013, respectively. with over 66% of exports going to Europe and the United States.8
  • 16. A LEADING QUALITY CONTROL SERVICE PROVIDER that partners with international Brands, Retailers and Importers to secure and manage their global supply chain. ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™
  • 17. With unique web-based quality control management, AI OFFERS PRODUCT INSPECTION, FACTORY AUDIT & LABORATORY TESTING SERVICES for more than 3,000 clients worldwide.
  • 18. DEDICATED ACCOUNT MANAGER A supply chain partner offering advice on your specific needs COMPREHENSIVE ONLINE MANAGEMENT Use your real-time dashboard to benchmark and identify your high performing suppliers PRODUCT EXPERTISE Hundreds of off-the-shelf customizable product specific checklists MOBILE Book, check reports and make decisions on the go INDUSTRY LEADING TURNAROUND Onsite within 48 hours. Reports the same day 80% of the time FLEXIBLE Cancel or modify orders up to 4pm the day before the inspection for free TRUSTED AND TRULY INDEPENDENT 100% QC. AI is not involved in sourcing and protects your factory information ALL-INCLUSIVE PRICING Easy to budget. No hidden costs ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY™
  • 19. TWITTER.COM/ASIAINSPECTION FACEBOOK.COM/ASIAINSPECTION LINKEDIN.COM/COMPANY/ASIAINSPECTION WWW. A SI A INSPECT ION. COM PRESS CONTACT MICHAEL MES ARCH • Tel: (+86) 755 2223 9888 Email: press@asiainspection.com
  • 20. 1/ Forbes. Queasy Reading: Shanghai Gov’t Shuts Down McDonald’s, KFC Meat Supplier. July 21st, 2014. http://www.forbes.com/sites/russellflannery/2014/07/21/queasy-reading-shanghai-govt-shuts-down-mcdonalds-kfc- meat-supplier/? 2/ Reuters. China police seize 30,000 tonnes of tainted chicken feet. August 26th, 2014. http://www.reuters.com/article/2014/08/26/us-china-foodsafety-idUSKBN0GQ0O720140826 3/ China Daily. Police bust gang selling toxic gelatin pill capsules. September 4th, 2014. http://www.chinadaily.com.cn/china/2014-09/04/content_18544268.htm 4/ China Law Insight. Revised Amendment to the PRC Food Safety Law. July 28th, 2014. http://www.chinalawinsight.com/2014/07/articles/compliance/revised-amendment-to-the-prc-food-safety-law/ 5/ Lexology. Harsher personal and corporate penalties for work safety accidents in China. September 12th, 2014. http://www.lexology.com/library/detail.aspx?g=c58eba21-3271-4bd3-85b6-aae4b12cca0d 6/ Myanmar Business Today. MGMA to Provide Jobs for 30,000 Garment Workers. September 16th, 2014. http://www.mmbiztoday.com/articles/mgma-provide-jobs-30000-garment-workers?utm 7/ Yahoo News. Garment industry says 200 plants shut since Bangladesh disaster. September 11th, 2014. https://news.yahoo.com/garment-industry-says-200-plants-shut-since-bangladesh-112755529.html 8/ Fibre2Fashion. Bangladesh global apparel export share to go up 1% by 2020. September 22nd, 2014. http://www.fibre2fashion.com/news/company-reports-news/newsdetails.aspx?news_id=167780&utm FOOTNOTES