Although there are many Chinese electrical home appliances in the Malaysian market, the perception towards Chinese products is always very negative. The study, therefore, aims to examine the perceptions of the Malaysian consumers towards Chinese electrical home appliances. The research findings suggest that the country-of-origin and product durability are important evaluation criteria for the Malaysian consumers. The country-of-origin effect influences the country image to a great extent. The Chinese products have a negative image. So, Chinese firms should raise the quality of the products in order to set a higher price in the Malaysian market. Moreover, it is suggested that China's electrical home appliance producers need to be more concerned about the quality issues in order to satisfy the Malaysian consumers' need and gain a positive image among the Malaysian consumers. Besides, local producers also are advised to ensure and enhance their product quality since the quality of the product is a critical component of long-term success.

First Western companies entered China in as early as 1979 when Deng Xiaoping announced the famous `Open Door' policy, and these brave pioneers were followed by successive waves of optimistic investors. As the Chinese market opened, many investors from various countries actively entered into the Chinese market. During the 1990s, China attracted around US$ 350 bn of FDI with joint ventures being the preferred mode of entry. Millions of cheap workers and tens of thousands of new engineers pouring out of Chinese universities and rapid economic growth attracted foreign investors to expand their business as well as shift their productions to China.

China has surprised the world with its robust economic growth throughout the 1980s and 1990s. According to the research done by Guntalee and Savika (2003), the average annual growth rate of GNP was about 9.4% from 1979 to 2003, which made China the fastest growing economy in the world. China contributed 27.7% to world economic growth in 2003, exceeding that of the United States, whose contribution in the same year was 16.3%. Surprisingly, China's import and export in 2003 reached a record high since 1995, surging 39.9% and 34.6% respectively, and the country has become the world's third largest importer and the fourth largest exporter (Guntalee and Savika, 2003). Intra-regional trade was the principal contributor to China's steady export growth throughout 2002, with Japan topping the list of overall trade partners. The Chinese exports to other Asian nations increased as companies from around the region moved their lower-end manufacturing processes to China. For instance, China's two-way trade with Malaysia jumped more than 50% in 2002, propelled by a 54% rise in People's Republic of China (PRC) exports.

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