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In most Western countries, all products have a basic warranty, required by law. Meaning: If that shit breaks real fast, you can return it and get your money back.
The issue with cheap Chinese goods is that returning them is unrealistic. The subsidized shipping only works one way. It's often the case that it costs more to ship the product back than the product costs in the first place.
Because of the mandatory warrantees, western consumers have a bare minimum expectation of the quality of any given product. Most Chinese-made products fail to meet that expectation. Hence, the reputation that Chinese products are crap.
You can't hand wave this problem away, saying you get what you pay for (also a common saying in the West). It's systemic. Also, I've taken risks buying more expensive versions of the same products and had the exact same result.
Meaning: Almost all of the time, you don't get what you pay for when you buy Chinese products. Rather, if you pay any more than the bare minimum, you're wasting your money.
This isn't a good situation for China or Western consumers! China doesn't like the reputation they've built and the West just wants decent stuff that meet basic standards of quality (and safety!).
Let me make something clear: There is no situation where paying very little should result in receiving a dangerous product. You cannot point to a power supply that caught fire and say, "should've paid more!" You cannot look at a plastic toy that leaches lead into the skin (and children's mouths) and say, "should've spent more money!"
In the West, companies that made such things would be held liable and probably go out of business very quickly. Their executives would be in the news and probably be testifying before angry Congressmen with even angrier constituents in the audience.
For some reason, Chinese manufacturers not only continue to make total crap—some of which is dangerous—they thrive on making such crap. No one seems to care in China. It's like you say, making money is all that matters. It is so obviously the general belief in China that it is the consumer's fault when products fail. You said so yourself!
So I ask you this: Was it the parents fault for feeding their babies contaminated baby formula? Should the people who installed toxic drywall have known better? Did the people who died from contaminated blood thinner deserve it for being poor consumers?
Perhaps the parents who bought Chinese made toys heavily contaminated with lead should've bought the expensive scanners and tested all the toys before giving them to their children? Or performed ASTM testing themselves to ensure the magnets inside various toys wouldn't fall out and choke and kill their children?
Let me tell you something: Toys made in West go through such testing. It was a lesson learned in blood over decades.
For some reason, China has yet to learn the lessons. Or perhaps it's Chinese culture just to not care and blame the victims?
...and...
There's another element of Chinese culture you're missing and it is that of "miànzi" (面子) or "face" as in our version of the phrase "saving face", or figuratively "reputation". The sellers do care about their reputation, but there are different groups they care about and groups they may not. You're likely a western end user retail customer. Most probably don't care about you. They might care about their reputation with their western reseller customers though.
The examples of poison drywall or adulterated formula are very bad by both Chinese and Western standards, but for slightly different reasons. The western view it as bad because it harmed the end consumers. The Chinese view would be a loss of face of the seller for being such a public and shameless scam without integrity or honor, a huge loss of face.
You're close to understanding, but you're still missing it. Again, you're judging this by western standards. Now, I'm western, and I like the western standards, but I also understand that their culture doesn't have to conform to ours for it to be "right". There is no objectively right way to do this. We're all different humans figuring different systems. I certainly have my preference for the western style, but that doesn't make what the Chinese have been doing for hundreds (3000 thousand, if you ask the Chinese) of years they've been doing less "right".
That's a very recent addition to western culture. Lots of toys even during my lifetime were dangerous. Two generations back, in the USA we had toys like this which heated up to 260 °C (500 °F):
Which caused serious burns and even some deaths for the children playing with them.
In the 1950s this was a toy:
You're bringing your perspective of individualism which is very much a Western idea. Other cultures don't come from that perspective and arrive and different conclusions. I can tell you, we'll see more of this press up on our western culture as trump continues to flounder our dominance and China continues to rise.