Zinc pest is caused by contamination of the smelted alloy and I believe it also can be caused if the elements in the alloy aren't in the right ratio. With smelting, contaminants can be things like carbon (from the furnace used to cast it), dirt and dust, moisture, and even things (I am not kidding) like sweat. It is interesting, when Lionel made the 700e zinc alloy casting was still relatively new, and likely they had problems with quality control. With Chinese manufacturing, it is much like some Japanese car products in the 60's and 70's, they outsource production of certain parts to little mom and pop shops (in Japan, many of them were run by Koreans living there who sort of lived and worked in the shadows in some ways), and they often lack the facilities or the expertise to be able to keep the alloy pure. Not to mention that the way they work the quicker they produce it the more they make, it is very different than how a large supplier works (basically, these little firms don't have a contract for X units at Y cost and have no incentive to make more than X); they basically make as much as they can as fast as they can and get paid per item, so if they turn out 1000 they make more than 750 (it is on a per piece basis)...as a result they don't care about quality, and the person who outsourced it doesn't care, bc the cost of pieces that can't be used is made up for the fact they are getting the parts so cheaply that it doesn't hurt their profits. The person who contracted the parts likely inspects them and gets rid of the obvious problem ones, but the problem is a lot of them likely are marginal but that will turn up well after the unit is made and sold someplace.
Normally the supplier who subcontracted it out would be in trouble if units fail, but the way outsource manufacturing works in China, the companies getting the product built don't really stand to lose much if products fall apart, if they fail under warranty they will fix them, but the cost of doing that (or of losing customers over quality issues) is low compared to their profit margin per unit likely.
You have to keep in mind these products are not being produced on state of the art assembly lines, it is very different than the plants you see that put together solar panels or fabricate chips, the production of the parts and the units for these trains is more like piece work assembly in a sweat shop in the clothing industry 100 years ago (actually very similar, the little shop producing the zinc cast parts was sort of like the women, like my Grandmother, who did things like embroidery for the rag trade in NYC, they would do it at home and get paid per unit they stitched, other small shops would have people cutting out nothing but pockets to be used by the clothing manufacturer.
