Business in China is quite different from the USA. Companies cooperate much more over there- to the point of sharing factories and making parts for each other.
It's more about price points than it is competing to produce a better product. If a company is producing a product for, say, ten bucks, and it is selling well, there is no incentive to improve it. If sales drop, the options are to cheapen it and lower the price, or improve it. Which direction they go is based on what is best for them. They do compete against each other, just not like we do in the US. That is starting to change, as some manufacturers are realizing they can get a substantially higher price for better goods. The problem with producing a better product is you need an advertising budget to back it. The most expensive part of cereal is the box...the advertising to support the brand. That's why so many makers are content to produce "no name" products at a lower price. That's why production moved from Japan to Taiwan, then to China. As workers get more skilled and produce better products, the price goes up. Workers demand more money, and that area can no longer build cheap goods. Next stop, India.







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