Santa On A Rickshaw: More Chinese Toys For Christmas

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Reuters reports that "Li Changjiang, the head of General Administration of Quality Supervision, Inspection and Quarantine, said factory owners in the southern province of Guangdong, China’s manufacturing heartland, told him business was booming.". It does not seem to matter that 23 million or so toys have been recalled by US companies this year.

Wal-Mart (WMT) and other large retailers and marketers of toys have admitted that they cannot do business without sourcing goods in China. Their margins depend on the cheap labor. And, what is left unsaid is that they cannot afford an army of inspectors to make certain that every toy is safe. "Don’t trust, but verify" does not work here.

The decision by US companies to keep moving in goods from China could back-fire this holiday season. Consumers may simply stage a silent boycott. They may quietly but purposefully move their spending to products that are made elsewhere. This holiday season will be the litmus test for whether shoppers will spend more money to get toys that are more likely to be safe.

Tell the children to look at the price tags. If the dollar amount is low, don’t open the package.

Douglas A. McIntyre