Mattel, the world's leading US toymaker, said last week that it had issued a global revoke of 1.5 million toys that were made in China, because the lead content in their paint may be over the allowed level.

Nevertheless, analysts say US importers are more to blame than even their Chinese suppliers for allowing those unsafe products to enter the US marketplace. China, the second-largest trading partner of the United States after Canada, is also the world's foremost toy supplier, producing more than 80 percent of the world's toys.

“US law is rather clear. The importer is responsible for quality and safety of good imported into the country,” said Erin Ennis, vice president with the US -China Business Council. "But China can absolutely do more to prevent such issues."

Revoke is not a “geographic issue”

Chris Byrne, a toy industry consultant also said that this Mattel's revoke is not a “geographic issue.”

While companies could decide to shift some of the production out of China into Malaysia, Indonesia or Vietnam, it doesn't guarantee that they won't face the same issues in these countries whose infrastructure is less developed than in China.

“Mattel is trusted as one of the safest brand names in the world,” Byrne said. “Such thing is very serious because it can shake consumer confidence in the brand. There's no way to put a nice face on it, especially when parents entrust their child's safety to your products.”

Other analysts also stressed that US companies should hold the responsibility for introducing much tougher testing standards in China. “American companies have to put their own people on the ground” said Sean McGowan, analyst of Wedbush Morgan Securities. “After this latest episode, I think the toy industry will have to implement a new control measure that's never been seen before,” he said.

Gerrick Johnson, analyst with BMO Capital Markets, fears that the toy industry will suffer more revokes in the future unless companies like Mattel, Hasbro and others tighten up quality standards and monitoring of their overseas factories. “From the reports that I get about China, the manufacturing areas seem like the wild wild east”.

While Mattel spokeswoman Jules Andres said that “50% of the company’s production is “outsourced” by the third-party Chinese manufacturers.

She also acknowledged that “Our Company ended the contract with these Chinese factories. We don't own that particular factory that made the revoked products, so we can't shut them down"

Poor regulation at home

In June, RC2 Corp also revoked 1.5 million "Thomas & Friends" wooden railway toys that were made in China over concerns that the surface paints contained lead, which could result in toxic.

According to the Toy Industry Association (TIA), the agency has provided toymakers with safety standard for all toys. The Consumer Product Safety Commission (CPSC) also regulates toys through its market investigation into both domestic and foreign-made toys. But some consumer interest activists argue that limited budgets prevent federal agencies like the CPSC from enforcing adequate product safety mechanisms for most consumer products.

Apart from specific safety guidelines issued by the CPSC mentioning the use of hazardous substances, flammability and noise levels, there is no requirement that toy manufacturers must comply with the industry's own safety standards.

“The CPSC doesn't have authority to test products before they are launched to market,” said Rachel Weintraub, director of product safety and senior counsel with advocacy group Consumer Federation of America (CFA).

“Chinese suppliers do face a threat of losing business”, said Ennis, “I think Chinese companies will face a very tough lesson if they don't have adequate solutions to such problems”.

But ultimately analysts agree that it is big US importers who will suffer the most from lax oversight of their foreign suppliers.