After Mattel Toy Recall, China Attempts to Improve Manufacturing LawsAug 31, 2007 | Parker Waichman LLP, LLP
Defective Mattel toys, tainted dog food and other dangerous Chinese imports have sullied that country’s manufacturing reputation. In response to international concerns over its imports, the Chinese government has adopted new toy and food recall laws that go into effect today. The government is hoping that these new legislative initiatives will rehabilitate the country’s image.
The new rules will require Chinese companies that make defective toys and food to cease production and sales until manufacturing issues are resolved. The manufacturers must then notify stores and customers of defective products, and issue replacements or refunds. The food laws establish three levels of severity and a timeline in which action must be taken against defective items. The new laws will be enforced by the Chinese Administration of Quality Supervision, Inspection and Quarantine.
Multiple recalls of hazardous Chinese products have caused consumers in the US and elsewhere to lose faith in the “made in China” label. On August 1, more than 1 million Chinese-made Fisher-Price toys were recalled because they contained lead paint. Two weeks later, Fisher-Price’s parent company, Mattel, ordered a recall of nearly 10 million more defective Chinese toys. This time, the toys contained dangerous magnets, as well as lead paint. Thomas the Tank Engine toy trains, Spongebob Squarepants notebooks and children’s jewelry are just a few of the Chinese goods meant for children that were found to be dangerous.
Food from China has also been problematic. In late June, the Food & Drug Administration banned imports of farm-raised seafood from China after finding chemical and antibiotic contamination. Earlier this year, a pet food ingredient from China that was tainted with the pesticide melamine killed several animals in the US.
Yet, despite its efforts to improve its own safety standards, some Chinese officials contend that American companies like Mattel shoulder some of the responsibility for the recent product recalls. In the wake of the Mattel recall, Li Zhuoming, executive vice chairman of the Guangdong Provincial Toy Industry Association, told the state-run Guangzhou Daily newspaper that Chinese factories have very low profit margins, in part because buyers like Mattel want inexpensive products. When foreign companies demand unrealistically cheap goods, they might get poor quality products from the Chinese factories. Other Chinese officials said that Mattel’s faulty designs, not shoddy manufacturing, were responsible for some of its recalls.
Though such comments are obvious attempts by Chinese officials to salvage their country’s manufacturing image, these arguments are not without merit. According to an article in Forbes magazine, if adjusted for inflation, toy prices are actually lower than they were 40 years ago. In order to keep prices low and profits high, toymakers like Mattel sent much of their manufacturing to China, where labor costs are a fifth of what they would be in US factories. Whether new laws and other policies by the Chinese government to address this situation will change that environment remains to be seen.