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Made in China is under attack again

Aug 16, 2007 10:02 AM IST Business Business

Hong Kong: China is now the factory to the world, making everything from TVS, to T-shirts, to toothpaste and toys.

The country ships over $20 billion of goods to the US every month. These exports are key to China's double digit economic growth. But that very growth is part of the issue with making safe products.

Says Senior Editor (Asia), Forbes, Robyn Meredith, "China is a developing country. It's been evolving for years and modernising its regulatory systems. Ten years ago, it did not even have product safety laws. What we're seeing today is that regulations China has right now on the books are not evenly enforced."

The result: contaminants in things like pet food and toothpaste, and lead in paint for toys like the ones involved in the recall by Mattel's Fisher-Price division -- of over a million plastic Big Bird's and Elmos.

Chinese officials say the manager of the plant making those toys killed himself over the weekend.

Says a Chinese trade analyst, Mark Michelson, "Trade is so strong these days but there is more pressure produced to maintain lower prices and therefore there is a lot of pressure on the suppliers to cut costs. So corners will be cut."

After the last recall, Mattel officials went to China to stress safety with its manufacturers. The recalls are a blow to Mattel's business just ahead of the toymaker's crucial holiday season.

"The latest scandals have served and will serve as a real wake up call for Americans. We have been importing more and more from China and we haven't necessarily been looking close at where we are getting it," says Robyn Meredith.

The chinese government has closed some factories and even executed an official in charge of product safety. But it may have to do much much more to restore consumer confidence in the "Made in China" label.