Trade War Looming as Made in China Toxic Consumer Goods Removed from Shelves
ConsumerWatch / China Aug 15, 2007 - 09:57 PM GMTChinese factories start to feel a chill as Wall Mart follows Mattel in removing substandard chinease products from their shelves.
The giant Lee Der toy company that used to employ 5000 workers remains closed after Matels recall of some 18 million toys, likely to cost the company in the hundreds of millions of dollars. Another 10,000 toy factories employing more than a million workers similarly await judgment day in the form of cascading bad consumer press.
The list of toxic consumer goods grows by the day, now including -
- Tyres
- Pet Food
- Children's Toys
- Seafood's
- Re useable Bottles
- Toothpaste
There is a growing call in many western countries inundated with cheap substandard chinease goods to boycott Made In China, any action along these lines will not only impact corporate profits of western companies and increase already mounting inflationary pressures, but likely to result in tit for tat retaliatory measures by the Chinease government which has the advantage in the form of well over one trillion dollars in reserves to cushion against a potential trade crisis.
Even if a trade war is avoided, this is a problem that can only get worse in the immediate future as the move to a requirement for higher quality control / production for the export market can only lead to much higher costs, therefore negating some of the benefits of outsourcing manufacturing to China. Thus more bad news for the financial markets on the back of the ongoing credit crunch.
On the plus side, the real winners of the eventual improvement in the quality of manufactured goods are likely to be the chinese themselves as domestic consumption continues to expand to a greater share of the economy.
Phillipa Green
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