US House of Representatives passed Consumer Product Safety Acton 19th, Dec.2007 and before that the Senate had approved it. Though it hasn’t been formed into law, the act has greatly influenced the toys exported from China to America. The toy industry greatly attends it and I have my opinion.

Ⅰ. About the amendment on lead limit

Lead is a kind of heavy metal elements and it has virulence of nerves. If overloading lead in body, it will influence central nervous system and reproductive system. Lead has its function in oil paint used in toys. Firstly, it brings in even and bright color and luster. Secondly, lead can enhance stickiness. After the toy recall event in America in the second half of last year, lead-free oil paint has been used in most of China’s exported toys to America and therefore the cost of oil paint largely increase. It will transfer the added producing cost to selling price if America passes the act, which limits the lead content to almost zero. It at last adds the load of consumers.

Ⅱ. Third-party testing goes mandatory

The new act prescribes that all local or imported products that take children under 12 years old (including 12) as objectives should accept independent test and certification of the third party. This provision will take effect within one year after the day of constituting. In the past, many big buyers of Europe and America, besides demand Chinese official qualification of testing organization, also demand qualification of agency organization (voluntary). Now it is forced to demand third-party certification (international certification organization). The repeated tests increase the expense and prolong the time of dealing with export procedure. It is disadvantageous to not only manufacturers but also market, meanwhile, consumers will have greater burden.

In my opinion, launching of this new regulation in toys in American will lead to the increase of cost but not make the toy export to America descend in large scale. At present, what I am worried about the most is the lasting pervasion of the shadow of America’s economic decline will lead to the decline of toy purchasing power. On 16th, Jan, the US Board of Governors of the Federal Reserve System proclaimed the Industrial Production Report of Dec., 2007, which showed that persistent downturn of American housing market and long-term credit contraction has influenced the individual consumption. Although the toy recall event in America last year has influenced the reputation of Chinese toys, after the government functional departments enhancing quality management and practical and realistic publicity and coverage to outside, the reputation of Chinese toys is gradually uprising.

At present, I think the toy industry should adopt the following measures to deal with the new American act.

1. Seek of organize to exploit oil paint that fits for producing toys. Though there is oil paint without lead in present market, the price is higher than that with lead. Seeking and organizing to exploit lead-free oil paint not only meet standard and demand of export market, but also bring in reasonable price. Guangdong Toy Association is actively promoting this process.

2. Independently innovate, upgrade and improve the industrial construction. This should be the future striving target of the toy industry. Only owning one’s own brand product through independent innovation can we control the market and price. Processing trade makes up 80% of national toy export, which is an excessive percentage. Guangdong has higher percentage--90%, coming with fewer brands and famous brands. Though the export quantity is large, the profit is low. First, enterprises should be active and manage to overcome difficulties; the second, we hope the government could adopt some correspondent supporting measures.

3. Continue to develop diversified export market. Due to the excessive percentage of export to America, the whole industry will be greatly affected when there is a sign of disturbance or trouble in American market. In recent years, Russia, Middle and Eastern Europe, Brazil and other emerging toy markets take off and we should enhance the development of these markets.

Seeing the global toy market, export and sale in domestic market are all developing. International market continues to grow in recent years. Sale in domestic market is estimated to have 18% rise in 2007 and 2008 is expected to be another brisk year.

Writer’s Bio:

Li Zhuoming, administrative vice precedent of Guangdong Toy Association (GDTA)