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Hong Kong - Foreign buyers who push for cheaper products must shoulder some of the blame for a wave of safety scandals over Chinese-made toys, a Hong Kong-based trade body says.
Jeffrey Lam, Chairperson of the Toys Advisory Committee of Hong Kong's Trade Development Council, says foreign buyers must share responsibility with Chinese manufacturers to ensure the long-term safety of products.
He said endless demand from foreign companies for lower and lower prices was helping to drive some toymakers to cut corners and compromise on quality.
"I urge them not to squeeze their profits unreasonably and drive them to make products that are sub-standard," he told reporters on the first day of Hong Kong's Toys and Games Fair, the largest in Asia.
Prices can be too low
"If they continue to squeeze the profits, we will end up in a dead-end street, no one will benefit," said Lam, a toymaker himself.
"Retailers and buyers should not pay prices that are not too low. It's not healthy. Product safety should be a shared responsibility for everyone in the production chain," he said.
Lam said labour costs were expected to rise by at least 30% this year. This, coupled with a strengthening Chinese yuan currency and rising costs of raw materials, would drive Hong Kong and mainland toymakers into closures, he said, adding that buyers should expect price increases this year.
Hong Kong is the world's second-largest toy exporter after China and there are about 4 000 Hong Kong-owned toymakers on the mainland, accounting for more than half of the products.
Massive recalls
China has come under strong international pressure after millions of toys exported to the United States and Europe proved to have dangerous defects.
US giant Mattel recalled 18 million toys in August, amid concern over toxic lead paints and magnets that posed a choking risk to children.
However, despite the recalls in the US and Europe, Lam said Christmas sales have been better than expected with a 25% increase in toy exports from the city last year.
"Before the Christmas sales, everyone was worried about the impact of the recalls but the facts show that... this has not been reflected in reality," he said.
Optimistic for growth
Despite concerns that a slowing US economy and the subprime mortgage crisis could affect consumer spending, Lam said he remained "cautiously optimistic" for good growth in toy sales in 2008.
He said the local industry should try to open up new markets such as the Middle East, Russia and Latin America.
The Toys and Games Fair, which runs until Thursday, features more than 2 000 exhibitors and welcomes more than 29 000 foreign buyers including major retailers such as Hamleys, Mattel and Toy R Us.
- AFP