Home > NewsRelease > The Future of China and the Toy Industry; it’s time to talk about it
Text
The Future of China and the Toy Industry; it’s time to talk about it
From:
Richard Gottlieb -- Toy Industry Expert Richard Gottlieb -- Toy Industry Expert
For Immediate Release:
Dateline: New York, NY
Tuesday, September 6, 2022

 

Others I have spoken with indicate a darker reason for moving out of China – the threat of a Chinese invasion of Taiwan and the subsequent shutdown of trade between China and the west.

Information in the toy industry flows on two levels. There is information to be found in our industry magazines and social networks, and there are communications that we share in private.

For example, Covid travel restrictions, and the change in policy by the Chinese government, have led some to openly discuss whether Hong Kong will resume its importance as a January destination. What is discussed in private is whether to maintain Hong Kong offices and showrooms.

Similarly, there have been below the radar discussions about the need to move not some but all production out of China. A reliable source has informed me that at least one major company is telling suppliers to be out of China in three years. There is also word that some Chinese toy companies are moving an increase amount of their production to other Asian countries, Viet Nam being the most prominent.

The conversation is getting louder, and some of this is just beginning to spill onto social networks. One CEO posted on Linked In that their company would no longer source in China. The objection was based upon what they saw as China’s stance on Hong Kong, Ukraine, and Taiwan. They also objected to China’s continuing use of lock downs and quarantines to fight Covid. The author states that other industry leaders intend to take a similar position. A number of industry executives “Liked” the posting.

The writer largely bases their company’s position on how they see the ethics of the Chinese government’s behaviors. Others I have spoken with indicate a darker reason for moving out of China – the threat of a Chinese invasion of Taiwan and the subsequent shutdown of trade between China and the west.

Through rhetoric and actions, China has indicated a desire to bring Taiwan back as part of the Chinese nation, much as it has done with Hong Kong. While no one can say that an invasion in the next few years is likely, it is possible. China has stated that an invasion is not off the table. Their recent military exercises give weight to that threat.

A cut-off of trade with China would be an existential threat to some companies. No company wants to find itself suddenly cut off from its primary supply source. That means moving production to other Asian countries, near-shoring to Mexico or eastern Europe, or re-shoring to the U.S.  

The path forward will be challenging for those who want to move production out of China. There is simply no country in the world with anywhere near China’s production capacity. If companies choose to re-shore, will their customers be willing to pay the higher prices that are inevitable from increased labor costs?

Many of us have good friends in the Chinese toy industry. These discussions and the decisions resulting from them will have a heavy impact on their lives and fortunes as well.

We need to have an open dialogue between all parties about the future of manufacturing in China. It will not be an easy conversation, but it will be an important one.

What are you hearing? What are your thoughts? Let us know.

Richard Gottlieb

Global Toy Experts / Global Toy News

646 675 3019

richard@globaltoyexperts.com

 

News Media Interview Contact
Name: Richard Gottlieb
Title: CEO
Group: Richard Gottlieb and Associates, LLC
Dateline: New York, NY United States
Cell Phone: 646-675-3019
Jump To Richard Gottlieb -- Toy Industry Expert Jump To Richard Gottlieb -- Toy Industry Expert
Contact Click to Contact