Troubled Times for The Chinese Toy Industry

The October 2007 recall was the latest in a series of Chinese toy recalls by toy companies and retailers in developed countries. Among the reasons given for the recalls were excessive levels of lead paint, loose magnets that could be swallowed by children, or other potentially serious problems.....

The recalls had a limited impact on toy sales in the US and the EU but they severely dented the Chinese toy industry's image in international markets.The possible long-term impact on its reputation, however, was only one of the many issues confronting the toy industry in China.With costs of raw materials and labor increasing, the toy companies were seeing an erosion in margins. Also, the growing popularity of high-tech electronic toys was a challenge to Chinese toy companies as they were not very strong in this field. Furthermore, even in the traditional toy markets, Vietnam and Thailand were beginning to pose a threat.....