Stringent safety measures implemented in the wake of high-profile toy recalls last year will drive up the cost of China-made toys by at least 10 percent this year, an industry executive said yesterday.
Hong Kong toy makers, most of which have production lines in China's mainland, have been struggling to repair reputations damaged by last year's recalls of millions of potentially hazardous toys.
Added checks along the supply chain are driving up costs and production time, however, said Michelle Chong, assistant to the director of The Toy Company (Hong Kong) Ltd, the buyer for a toy wholesaler in Germany.
Chong said her company expected to spend US$1 million this year on quality control - up from US$300,000 in previous years - to test each of the painted toys they buy before they are shipped to the wholesaler.
Overall, the new checks and balances could push up prices by an extra 10 percent this year and dent their competitiveness, she said.
"I'm not particularly worried about (the quality of) our exports," Chong said. "I'm more concerned about the production period, which now takes longer as we have to comply with the more stringent safety requirements."
Chong's company was one of 2,000 exhibitors from 36 countries at the annual Hong Kong Toys and Games Fair, which runs through Sunday. It was organized by the Hong Kong Trade Development Council, a semi-government agency that promotes Hong Kong goods.
The fair was running alongside a second, similar one this week. Both were trying to rebuild trust in the Hong Kong and China brands.
Jeffrey Lam, chairman of the council's toy advisory committee, said the recalls of China-made toys were having a limited impact on Hong Kong, the world's second-largest toy exporter after the Chinese mainland.
Hong Kong toy exports grew 25 percent to US$11.4 billion in the first 11 months in 2007 over the same period of the previous year, he said.
(Shanghai Daily January 8, 2008)
