China: Toying With the World

Mattel Inc. just announced its second recall in a month of toys made in China, this time for 9 million of them, which contain either lead paint or magnets children could swallow. How did China become the world’s largest manufacturer of toys?

How many toys are made in China each year?

Toys made in China constitute about 75% of the world’s toy output. Hundreds of millions of toys are imported into the United States alone each year, and approximately 70% to 80% of those toys are manufactured in China. And that translates to big money: Last year, the U.S. imported $20.9 billion worth of toys and games from China. (Streetinsider.com and Money.cnn.com)

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Why does Mattel manufacture so many of its toys in China?

Well, the bottom line is, the bottom line—labor is significantly cheaper in China. At one of Mattel’s biggest factories in Guanyao, a city in south China’s Guangdong province, many of the 3,000 workers put in “10 hours a day, six days a week, for about $175 a month, typical for this region.” The average wage for a factory worker in the U.S. is around $15 to $30 per hour. (Telegraph.co.uk and Machinedesign.com)

When did Mattel start moving its operations to China?

Way back in 1967. Mattel opened a factory in Taiwan, which was used to manufacture Barbie Dolls. Some experts consider Mattel “to be a trailblazer for the ‘outsourcing’ phenomenon that made eastern Asia the workshop of the world.” In 1987, as Taiwan’s labor force had become more prosperous, Mattel moved over to the Chinese mainland where wages were even lower, and has remained there ever since. (Telegraph.co.uk)

Does anybody make toys in the U.S. any more?

Yes, and the remaining American toymakers are rushing to capitalize on China’s recent mistakes. Whittle Shortline Railroad, a Missouri company that makes wooden trains and trucks, recently added a banner on its Web site saying its toys were “100-percent kid-safe” with “lead-free paints.” The company’s sales have jumped by 40 percent since China’s string of recalls began. “People are not going to forget this,” said Mike Rainville, owner of Maple Landmark toys in Vermont, “for at least this Christmas season.” (NYTimes.com)