Trade War Looming as Made in China Toxic Consumer Goods Removed from Shelves

ConsumerWatch / China Aug 15, 2007 - 09:57 PM GMT

Chinese 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

The Market Oracle is a FREE Daily Financial Markets Forecasting & Analysis online publication. We present in-depth analysis from over 100 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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Comments

santa cruz hal 15 Aug 07, 23:02	chinese manufacturing My personal experiences with chinese goods are they are substandard in the consumer area. However they can make some good products, the RC hobby area is competitive and the purchasers are willing to try new vendors but will discard them quickly if quality is lacking... The remarks about the dollars that china has are very misinformed...given todays evolving credit crunch the chinese central bank will not move too much away from the "yankee dollar!" T bills are looking better every day!
Ray 29 Aug 07, 11:08	Don't be so hard on the chinese They are supporting our national debt so be nice to them. A little lead paint never hurt anyone.
Dave McCullough 04 Sep 07, 11:55	Boycott Chinese Products I have personaly been boycotting Chinese goods for about 5 years now due mainly to the way the Chinese have occupied Tibet, influenced and now finaly destroyed the economy of Rhodesia, they are meddling in the Sudan, they are using slave labour in there factories[ 9 million people working in their "special economic zones" for 35 cents a day] and last but not least is the practice of harvesting prisoners organs for a quick buck. If they were white,or English speaking, people would be protesting all over the world. They have a space program and nuclear weapons and Canada pumps millions of dollars of foreign aid to them!
John Remmingston 18 Nov 07, 15:15	China Debate Special economic zones in China are actually "free trade zones". It is also illegal to have slave labourers in China, and they do not harvest Organs (it was an isolated event just as THe US's Prison camp in cuba tortured their prisoners) because Chinese have morals and EVERYBODY are against organ harvesting. Thirdly, we benefit from Made in CHina, because the money invested is being returned 10X the amount (an outflow of money from China to us).

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