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China Focus: Chinese toy producer in dead end after Mattel recall
2007-09-25 05:36:33 Xinhua English

GUANGZHOU, Sept. 25 (Xinhua) -- Operation of a Chinese toy maker has come to a full stop after its U.S. partner Mattel Inc. recalled about 1 million lead-tainted toys.

More than 2,500 employees with the Lida Plastic Toys Co. Ltd. based in Foshan City of Guangdong Province, which is a longtime contract manufacturer of Mattel, are temporarily laid off without pay since the world's largest toy maker announced the recall earlylast month.

Export business was suspended and toys worth about 50 million yuan (6.6 million U.S. dollars) have been overstocked, resulting in a halt of capital inflow, said Xie Yuguang, board chairman of Lida.

Construction of three factories and a new dorm for short-term employees were also forced to stop.

Seeing no way out, Lida's boss Zhang Shuhong, a Hong Kong businessman in his 50s, hanged himself on Aug. 11 after paying offdue salaries to all employees and sending them home.

Workers said Zhang always gets along well with others and it isa pity that the "good man" who had been in charge of Lida's management since 1993 could not realize his dream of business expansion.

It was estimated that the factory, which had been producing toys to Mattel for more than 10 years without any bad records, would suffer 30 million yuan (about 4 million U.S. dollars) in economic losses.

"We have been trusting our subcontractors and failed to conduct tests on paint materials," said Xie Yuguang, board chairman of Lida.

Initial investigation shows that Zhongxin factory, based in Dongguan City of Guangdong, had fabricated safe quality licence for color powders -- the key component for producing paint - that contains excessive lead.

Police have detained four Chinese suspects who are alleged to supply substandard paint to Lida Plastic Toys Co. Ltd.

"We take responsibility for the toys we made," said Xie, while expressing the regret that Mattel's latest apology could not help Lida get out of the predicament.

About 70 percent of toys in Guangdong are made for overseas clients according to their design and requirements, said Zhang Xiaolue, an official with the Guangdong Provincial Administration of Quality Supervision, Inspection and Quarantine.

"Both sides should shoulder the responsibility of supervising the whole process of production, including material quality," saidGuo Zhuocai, vice chairman with China Toy Association (CTA).

Xie blamed foreign media for playing up the quality issue whichplaced Lida in a hopeless situation.

"Mattel revealed the name of our company to the public under great pressure from the media, which made us the target of the event," said Xie.

Recall of substandard products is not unusual in the U.S. market, as the U.S. Consumer Product Safety Commission announced some 30 recalls in July, said Li Zhuoming, vice-chairman of Guangdong Provincial Toy Association.

The media vigorously propagated unsafe made-in-China goods but paid less attention to some non-Chinese products that even caused injuries, Li claimed.

A senior official with the European retail giant Carrefour on Tuesday called upon foreign media to stop exaggerating quality problems of made-in-China products, claiming that such reports would not affect Carrefour's purchase in China.

Jean-Luc Chereau, advisor to the chairman of the management board of the Carrefour Group and president of the Carrefour (China) Foundation for Food Safety, told a symposium held in southwest China's Sichuan Province that more than 95 percent of goods sold in Carrefour's Chinese outlets come from local suppliers, and 99 percent of them are up to safety and quality standards.

"When a case of substandard products occurred in China, media coverage on the case often led to an impression that all Chinese products had problems, which could not reflect the whole situation and should be contained," said Chereau.

He said he is happy to see the Chinese government's awareness of the significance of quality control and the efforts it has made.

"China has already improved the quality of its products by a great deal," said Chereau.

Thomas A. Debrowski, Mattel's executive vice-president for worldwide operations, made an apology to China's product safety chief Li Changjiang on Friday, saying Mattel "takes full responsibility" for three recalls it ordered this summer and "vastmajority of its toys were recalled as a result of design flaws rather than manufacturing errors by Chinese manufacturers."

Mattel said it understood the result of the recalls that had caused for the reputation of Chinese manufacturers.

More than 300 Chinese toy makers have had their business licenses suspended or revoked in a national quality overhaul, said Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine.

China, the world's largest toy exporter, has been paying great attention to safety and quality of toy products, according to officials with CTA and China Chamber of Commerce for Imports and Exports of Light Industrial Products and Arts-Crafts (CCCLA).

The two organizations have pledged to strengthen quality inspection over Chinese goods along with foreign toy makers and importers and push domestic enterprises to improve self-supervision.

Soon after Mattel's first recall, many Chinese toy exporters and CCCLA jointly called on domestic toy producers to reject product orders beyond their production capacity or without explicit quality standards, and maintain strict quality tests of purchasing, production and sales.

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