Troubles in the Chinese toy industry

Hu Lantian, owner of the PP Bear Toy Company in Shenzhen, southern China, shows off the toys that would have been Christmas gifts for European or American children, but due to the global economic downturn, they will be sold on the indoor market. [China Daily]

All is not well in the land of Chinese toys. Even as manufacturers huddle against the cold winds of recession and await rescue from Christmas sales, they now have to deal with tougher safety standards imposed by importing countries.

“I wish children around the world a safe and happy Christmas and hope that toys made in China will bring them joy,” Chinese Foreign Ministry spokesman Qin Gang said at a recent conference. from the ministry in response to questions about how China would provide security. of her toys before the busy Christmas period.

The ensuing Christmas season could prove mixed for exporters, industry insiders say. While some key manufacturers may have cause for celebration, that may not be the case for many small and medium-sized businesses, as they may need to make costly technology upgrades before exporting.

standard deviation

“This is the most terrible Christmas season we’ve seen in a decade. Falling orders, soaring costs, price pressure from buyers and tight safety standards further complicate things for us,” says Lin Jianmin, founder and general manager of Quanzhou Jianmin Toy Co Ltd, located in Quanzhou Science and Technology Development Zone, Fujian Province.

The factory, which has annual sales of around 2 million yuan, employs 30 people and produces plush dolls, usually as Christmas gifts for children in North America and Germany. The busiest season for Jianmin Toy Co Ltd normally runs from August to November, but this year orders have dropped nearly 50% from last year.

This was compounded by frequent adjustments to the production line, Lin says. The toymaker had to make production line changes twice a month. When the orders from Germany were canceled, Lin had to adjust the program of machines that produced German orders to meet American requirements, since the safety criteria differed for the two countries.

Other changes were called for after the US Congress passed new federal children’s product laws in August, setting higher standards for toy safety.

“We have had to make such adjustments from time to time over the past few years, as developed markets have different security standards and their policies are constantly changing,” Lin says.

Such changes affect the working efficiency of the factory and increase the cost. “It takes about a week to adapt the machines to the new procedures and it also involves huge expenses for the purchase of substitute materials if needed.

“I don’t know if I can survive after this year, but I can promise what we make is absolutely safe and qualified,” the middle-aged Quanzhou native said, adding that the poor quality and safety issue would be strongly punished by the local. control and inspection authorities.

“We (China) constantly urge toy makers to strictly control product quality and improve supervision and inspection of the entire production process,” said Qin from the Foreign Ministry.

Amid growing concerns about the safety of Chinese products, the EU and the United States launched negotiations for a common safety standard for toys on November 17 in Brussels. The talks were officially opened at a high-level trilateral meeting between EU Consumer Commissioner Meglena Kuneva, US Consumer Product Safety Commission Chairwoman Nancy Nord and China’s Vice Minister for the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). Wei Chuanzhong.

The three parties have decided to take their joint efforts to a new level by aligning their standards. Toys will be the first targets, since about 75% of toys sold in the world are made in China.

“Common standards and policy consistency are very important for Chinese manufacturers to do business in a fair and transparent framework,” said Liang Mei, vice president of the China Toy Association.

Chinese producers complain about the different standards applied on both sides of the Atlantic Ocean. The regulatory divergence is a “challenge” to safety, Nord admitted while speaking of the “historic opportunity to make progress on toy standardization”.

Technology development

Lin’s neighbor is Quanzhou Gladpoint Co Ltd. Compared to Jianmin Toy Co Ltd, the toymaker with 50 million yuan in assets and 780 workers seemed as busy as usual – all production lines running at full speed – from August to November.

“Orders this year are stable and we are optimistic,” said Huang Rongfu, director of Gladpoint’s export department, adding that he believes the economic downturn and tighter safety regulations are opportunities for the company instead. to stand out from its competitors.

“In the midst of the financial crisis, everyone is becoming frugal and selective as well. They are turning to established brands for safe and reliable products, these are our advantages,” Huang points out.

Although orders from long-term buyers have fallen, many buyers have shifted their orders from small workshops to Gladpoint, which makes plastic toys, stuffed dolls and wooden building blocks and exports them to the United States. , Europe, the Middle East and Southeast Asia.

The company has been able to promote its brand overseas successfully by participating in several toy events as well as its self-developed designs for customers.

Huang adds that the company’s focus on research and development would help it overcome new “technological barriers” and avoid security disputes.

“Although developed markets are constantly issuing new technology criteria, which are getting tougher and tougher, we are still well prepared in advance,” Huang said. The company claims that it spends 10% of its sales annually on professional study and technology development.

A special team is also engaged in researching and studying various countries’ technology standards and international trends, while a professional group is dedicated to self-development, he said.

“We manage to make our own safety standards higher than the general ones or keep them ahead of the criteria of export markets,” Huang says, citing the example of lead content in toys.

New US standards set the maximum allowable lead content at 600 ppm (parts per million), effective February 2009. Gladpoint’s internal benchmark, however, has been set at 500 ppm since the start of this year. “Advanced technology helps us reduce costs and improve safety reputation,” says Huang.

The manufacturer offers self-development products or designs for customers to choose from, which not only highlights their research and development capabilities, but also reduces the risk of design defects, said China’s Liang. Toy Association.

Since last August, Mattel Inc has recalled approximately 21 million toys in five weeks, many of them due to excessive levels of lead paint.

However, the biggest US toymaker admitted last September that the recall was the result of a design flaw in Mattel’s design and apologized for damaging China’s reputation.

Qin, at the same conference, wanted Chinese toymakers to check designs provided by overseas buyers for flaws that could later lead to quality or safety issues.

“We ask Chinese toy makers not only to pay attention to the manufacturing process, but also to strictly check the design failures of foreign companies,” he said, “Chinese toy makers should not accept orders with bad designs from foreign companies nor produce them.”

“Flaws in the design of products that foreign companies bring to Chinese manufacturers to produce, explain a large part of the recall problems,” says Bruce McLaughlin, managing director of Sinogie Consulting, which helps foreign companies investigate the reliability of manufacturers. Chinese. He points out that Chinese toymakers have made good improvements on safety issues and that “reliability in general has steadily improved.”

According to statistics from China Customs, from August to November, the busiest season for Christmas toy trade, China’s toy export volumes increased 3% to $3.86 billion, compared to 3.74 billion dollars in the same period last year.

Troubles in the Chinese toy industry

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