The idea is that instead of thinking about how to create a better product, you spend your time fiddling with the ingredients, substituting cheaper ones, making the containers thinner, cutting back on quality control, etc.
(Eg when a Chinese company puts a stick "No Animal Testing" on a cosmetic product, it doesn't mean they care about animal rights, it just means that they do no testing whatsoever.)
What was initially a low margin (or perhaps you were even selling it at a loss) product slowly become profitable over time. Eventually this gets pushed too far and people die of food poisoning or decide they hate your products.
Paul Midler has a blog that has some great stories, such as this one:
Tainted Chinese Fluoride. A water works company in Massachusetts has been getting its fluoride from China, and it believes that what they’ve been receiving is actually a kind of counterfeit. From one report:
Department of Public Works Director Rob Desmarais said after he mixes the white powder with water, 40 percent of it will not dissolve. ”I don’t know what it is,” Desmarais said. “It’s not soluble, and it doesn’t appear to be sodium fluoride. So we are not quite sure what it is.”
Desmarais said the residue clogs his machines and makes it difficult to get a consistent level of fluoride in the town’s water. Since April the fluoride pumps in Amesbury have been turned off and they will stay that way until Desmarais can find out what’s in the fluoride that’s imported from China.
America has been taking a page out of China's playbook, especially when it comes to food products. After I read about an "innovative" procedure that injects ammonia into e-coli tainted beef "fatty trimmings", I've pretty much sworn off hamburgers in the US. (Read McDonald's hilarious response where they claim ammonia is okay just because it's naturally occurring). To make it even better, the wholesalers mix the ground beef from various suppliers *before* any testing takes place, in order to ensure that no one can be held responsible in the case that someone gets poisoned.
Something that I really appreciate in Europe is that the protectionism around various countries' agriculture industries has to some extent prevented a dominant company like ADM from rampantly corrupting policy at the EU level.