(Bloomberg View) — Hoverboards are the hot gift this holidayseason. Perhaps too hot, according to the U.S. Consumer Product SafetyCommission. In recent weeks, the commission has received atleast 10 reports of the motorized, self-balancing scootersbursting into flames; new reports are"increasing daily." In response, Amazon has de-listed mosthoverboards, and airlines are banning them from planes. Under fire,the commission's launched an immediate investigation.

Inspectors won't have to look far for answers. As Wired reportedlast week, many cheap, no-name hoverboards (some of them costingless than $200) are packed with low-end, Chinese-made batterieswith a propensity to ignite. That's a problem for Americans whoeconomized on their hoverboard purchase. But it's an even biggerproblem for Chinese manufacturers as they struggle to overcome areputation for turning out shoddy products. At a time when thegovernment is spending handsomely to improve the standards ofChinese manufacturing, the hoverboard debacle is an opportunity totake stock.

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Step one is recognizing that despite ongoing efforts, China hasmade very little progress in improving its product standards. In2014, for example, the European Union reported that 64% of theproducts recalled or withdrawn from member countries for safetyissues had originated in China. More recently, the U.K. governmentannounced that 88% of the 17,000 hoverboards it had inspected sincemid-October had been found "unsafe" and been impounded. (Forperspective, 400,000 hoverboards were shipped from one Chinese cityin October alone.) Indeed, the high premium that Chinese consumersthemselves place on foreign-made goods — especially thosefrom arch-rival Japan — testifies to the deep mistrust oflocally-made goods.

The irony is that China Inc.'s quality issues are partly afunction of one of its greatest comparative advantages: the speedand adaptability of Chinese factories. The question of who inventedthe hoverboard is debatable, but by the time it became a culturalphenomenon over the summer (when Jamie Foxx rode one onto theTonight Show stage), dozens if not hundreds of Chinesemanufacturers were making them. Some had been churning out less-faddish products only weeks before.

Several factors enabled such a quick transition. First,intellectual property protection is weak in China, so copycatmanufacturers have little to fear from ripping off new products.Second, China's regulatory framework is also weak, with fewproducts subjected to safety reviews (such as the UnitedLaboratories — or UL — reviews that are a goldstandard in the U.S.) or to product-liability lawsuits. As aresult, manufacturers have little reason to take the extra time tomake a product right — and every incentive to speed it outthe factory door.

Finally, there's the extraordinary manufacturing ecosystemthat's evolved in southern China over the past three decades.Within 200 miles of the high-tech hub of Shenzhen, factoriesproduce parts and components to make almost any electronic good.Lately, lithium-ion batteries — found in everything fromcars to iPhones — have become a key ingredient. Accordingto Woodbank Communications, a U.K. battery consultancy, over 100companies now make lithium batteries in China.

Some of them turn out high-quality products for companies likeApple and Samsung. For a company to gain access to those high-endbatteries, however, requires being able to order in Apple orSamsung quantities. Small manufacturers looking to make 10,000hoverboards (as opposed to tens of millions of iPhones) are out ofluck. So they're left dealing with smaller companies who oftenmaintain subpar standards.

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Cleaning up these safety issues is going to require reforms thatgo well beyond the investments in Internet infrastructure,automation, and R&D that the Chinese government is currentlysponsoring. A key first move is enforcing the health and safetyregulations that China already has on its books. In August, forexample, China rolled out a long-awaited safety-and-qualitystandard for lithium-ion batteries; judging by the recenthoverboard problems, companies seem to be ignoring the rules.Meanwhile, Chinese law providesfor government-chartered consumer groups likethe China Consumers' Association to file lawsuits— including product liability lawsuits — onbehalf of consumers; they should start doingso.  Until Chinese manufacturers face real costsfor their mistakes, problems will persist.

Meanwhile, retailers like Amazon can help. According to onehoverboard manufacturer quoted by CNET, last Friday Amazon demandedthat hoverboard manufacturers "provide documentation demonstratingthat all hoverboards you list are compliant with applicable safetystandards" in order to be listed on its site. While such measuresmay not do much to help hoverboard sales this year, maybe 2016′shot gift won't be a threat to set the tree on fire. 

This column does not necessarily reflect the opinion of theeditorial board or Bloomberg LP and its owners.

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