Sounds like some hasty butt covering to me.
if that drywall was only made for 'domestic' use - how did the US buyers purchase it - they forced them to sell it to them? If it wasn't supposed to be sold out of country - how did it get exported?
Not to mention - nice of them to build hazardous stuff for their own people.
I wonder if the bad stuff wasn't MEANT for export - and they're scrambling to cover up.
That the products are made for domestic markets means that they are targeted towards domestic consumers, much as Walmart sells $15 sneakers to working class consumers that Warren Buffett can buy if he chooses to. Chinese manufacturers will sell these products to whomever wants to buy them, but the reality is that most of their buyers are domestic builders. Even if they wanted to sell only to domestic buyers, any foreign importer can simply use Chinese middleman to circumvent this notional restriction. But the reality is that the average private Chinese business is competing against hordes of competitors with the same price and the same quality product. He can't afford to pad his costs by hiring people to investigate the end user.
And this stuff about butt covering is silly. These manufacturers don't have any US operations, and no Chinese court will enforce a US judgment against them. And in the remote eventuality that a Chinese court did, they would simply file for bankruptcy and go under. These are mom-and-pop operations, not multi-billion dollar companies listed on the Shanghai stock exchange.