Foreign Buyers Share Blame for China Toy Safety Says Trade Group

The Hong Kong Trade Development Council said demand for lower prices is causing toymakers to cut corners.

Some of the blame for a wave of safety scandals over Chinese-made toys should be attributed to foreign buyers who push for cheaper products said a Hong Kong-based trade body said on Jan. 7. Jeffrey Lam, chairman of the Toys Advisory Committee of Hong Kong's Trade Development Council, said foreign buyers must share responsibility with Chinese manufacturers to ensure the long-term safety of products. He said endless demand from foreign companies for lower and lower prices was helping drive some toymakers to cut corners and compromise on quality.

"I urge them not to squeeze their profits unreasonably and drive them to make products that are substandard," he said on the first day of Hong Kong's Toys and Games Fair, the largest in Asia. "If they continue to squeeze the profits, we will end up in a dead-end street, no one will benefit," said Lam, a toymaker himself. "Retailers and buyers should not pay prices that are not too low. It's not healthy. Product safety should be a shared responsibility for everyone in the production chain," he said.

Lam said labor costs were expected to rise by at least 30% this year. This, coupled with a strengthening Chinese yuan currency and rising costs of raw materials, would drive Hong Kong and mainland toymakers into closures, he said, adding that buyers should expect price increases this year.

Hong Kong is the world's second-largest toy exporter after China and there are about 4,000 Hong Kong-owned toymakers on the mainland, accounting for more than half of the products.

Despite the recalls in the U.S .and Europe, Lam said Christmas sales have been better than expected with a 25% increase in toy exports from the city last year. "Before the Christmas sales, everyone was worried about the impact of the recalls but the facts show that ... this has not been reflected in reality," he said.

Lam said he remained "cautiously optimistic" for good growth in toy sales in 2008, despite concerns that a slowing U.S. economy and the subprime mortgage crisis could affect consumer spending. He added that the local industry should try to open up new markets such as the Middle East, Russia and Latin America.

The Toys and Games Fair, which runs until Jan. 10, features more than 2,000 exhibitors and welcomes more than 29,000 foreign buyers.

Copyright Agence France-Presse, 2008

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