Troubled Times for The Chinese Toy Industry

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Excerpts

Chinese toy companies, like other companies in the manufacturing sector, benefited from the reforms initiated in China in 1979.With the opening up of the Chinese economy, toy makers from Hong Kong, which by then had become a major global center for good quality toys, started setting up production facilities in mainland China in order to take advantage of the lower operational costs. However, most of the value-added work such as product design, production planning, quality control, management, and marketing continued to be done from Hong Kong....

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Though the Chinese toy industry had several strengths, it was also up against several problems that had the potential to significantly impact future growth. To start with, Chinese toy companies were faced with the dual pressures of rising costs and declining prices.......

In an attempt to improve the quality of toys, the Chinese government sponsored a two-day training session on October 11 and 12, 2007, on quality control for more than 1,000 people from the Chinese toy industry. At these sessions, Chinese government officials and executives from multinational companies lectured on European and US quality and safety standards, China's toy licensing system, toy certificate systems, export test regulations, etc. Participants were also taught how to deal with high lead levels or design flaws in their products.......

Exhibit I: Products Recalled in the US in October 2007
Exhibit II: Major Toy Manufacturing Centers in China
Exhibit III: Chinese Toy Import and Export Statistics
Exhibit IV: A Note on the ICTI Code
Exhibit V: Toy Recalls between 1988 and 2007
Exhibit VI: Trends in The Toy Industry as of 2007