Monday December 24, 2007
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Monday December 24, 2007 Reuters, on Dec. 19, reported that Democratic presidential hopeful Barack Obama said on Wednesday he would ban all toys made in China. "The Japanese do this on food, they basically say to China, you cannot import food unless you meet our safety inspectors." He said.
Who gets hurt if the US bans China-made toys?
Factories in ShenZhen, China, made the toys. They came to the US most likely at the Long Beach port. From there trucks carry them to to a store near a consumer. This consumer pays for the toy and give it to someone, probably a child.
During this whole process, the manufacturing part (in China) got just a fraction of the total value. Most of the money goes to the retail chain and the toy brand owner, like Mattel, a US company. Mattel employs many US employees. More importantly, it has many US shareholders. Banning toys import hurt the US more than China.
Many unsafe toys are made in China, but not all bad toys are made in China. China made many unsafe toys, but not all toys made in China are not safe. China is not the only country that produces unsafe toys, nor is she producing only unsafe toys. The criteria of the ban, as proposed by Mr. Obama, is not logical in achieving the goal — allegedly to eliminate all unsafe toy from US market.
This proposal hurts US economy and is not effective in achieving its goal.
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And who gets hurt when Matel, et. al. have to recall the toys not made to safety standards? I dont think the guy who made the stuff in china is going to absorb the brunt of the financial impact. After all, he only gets 10 cents on the dollar anyway.
Its Matel who gets to deal with the large stock of worthless toys that must now be destroyed (or sent to a place where safety standards are for wimps. Like back to china). If the company is small enough (not matel), then chances are they will go under and put a bunch of folks out of work.
Now, lets say you shift the manufacture of the toys from china to some other place. The entire supply chain is still in effect (sans the doc workers if it is made domestically). You have to get the toys from the point of manufacture to the store. Its not like the toys would suddenly be made _in_ the store, cutting out that entire chain.
If you read between the lines, you see that he is not suggesting a permanent and outright ban. It is only a temporary fix until a safety checking system can be put in place. Japan does not ban the import of food from china, they ban the import of uninspected food from china. Big difference.
The only reason most of the toys are made over there is because it is cheaper. It is not just the labor that is cheaper (that is a small part of the equation), its because dealing with the environmental and safety issues is cheaper. Need to get rid of some nasty toxic stuff? No problem, just dump it in the river. Worker got his hands cut off in the equipment? Get another worker with hands.
That said, china is quickly wising up to what we discovered a hundred years or so ago: you cant just dump the toxins in the local river. As they develop a middle class who likes to be able to breath clean air and drink clean water, they are starting to crack down on the issues (they have kids too ya know). You can be that sooner rather than later they will have similar environmental and safety standards in place and the cost of their goods will rise. This will shift the manufacture of things like toys elsewhere. Like back to the US since you can avoid that long distance shipping charge.
Posted by John on December 24, 2007 at 11:44 PM CST #
Merry Christmas
Posted by Michael on December 25, 2007 at 01:56 PM CST #