The quality of the fittings, the fit and finish of the handle and sheath. The polish of the blade, which sets the final balance and sharpness of the sword. These are all just as, if not more important than the composition of the steel in the blade.
A well made handle with good quality fittings and wrap means the sword will feel good when held, and everything will stay rock solid with no shifting about when used hard. A well made sheath means that it can be drawn and re-sheathed almost effortlessly, besides looking very nice.
The Chinese companies have only been producing swords for a short time and, although they have been improving steadily, they are still not that good. In addition, they are trying to produce inexpensive swords, so many corners are cut. It is these corners that make the difference between a useable sword and a good sword.
I think these points are tremendously important, and thank you for bringing them up.
I don't have experience with Japanese swords, but I do have experience with the Chinese straight sword (jian) and Broadsword (dao). Most of what is readily available on the market today for Chinese style martial artists is incredibly poorly made. The blades are superlight wushu steel, just a toy really, not a true weapon. Even if you manage to find a "better" blade, the hilt and scabbard are amazingly flimsy and poorly done. Most of these feel like they will fly apart in an instant if you even try to do a form with them, much less actually do a cut.
I've done some experimenting with rebuilding these swords. I don't have any blade making knowledge or experience, but I have rebuilt a number of hilts and scabbards, probably 20 or more hilts, and 4 or 5 scabbards. I've managed to find a handful of "better" quality Chinese blades (usually these are jian made in the 1970s or earlier, before the Modern Wushu craze hit and everything just got lighter and junkier). I've also worked with a few blades made by Angus Trim up in Washington State, he makes a good quality blade out of 5160 spring steel, nice dimensions and well balanced.
Anyway, I carve the handles and scabbards out of nice hardwood, and cast solid guards, pommels, and scabbard fittings out of bronze. I even did a couple in silver. This is where many corners are cut in the mass-produced Chinese swords. Having a solid hilt makes a HUGE difference in the performance, and feel of the weapon.
I've sold a handful of them, mostly to my classmates and my sifu, but it takes a lot of work to rebuild these and not many people seem to want to pay for that. It seems that most people in the Chinese arts are content to use a crappy $40 special from Chinatown.
My work is far from perfect, I definitely learn a lot about design, balance, and quality of workmanship as I go along. But the worst of my pieces is still a million times better than the best of these Chinese made pieces.
anyway, I have a photo gallery here on martialtalk, with a number of my pieces on display. Feel free to take a peak, if anyone is curious.
Interesting discussion, anyway.