China defends its brand as Mattel recalls toys

GUANYAO, China (Reuters) - China leapt to the defense of its products on Thursday after Mattel Inc. of the United States said it was recalling 1.5 million Chinese-made toys worldwide because their paint may contain too much lead.

The recalled toys made for Mattel's Fisher-Price unit include popular preschool characters like Elmo and Big Bird and dozens of other items. The case is the latest in a deluge of product safety scares that have tainted the "made in China" brand.

Vice Commerce Minister Gao Hucheng repeated the government line that Chinese products were overwhelmingly safe, and called on foreign media not to hype the problems of a small minority of goods or companies.

"When problems occur, we never shirk, have always sought truth from the facts and responsibly deal with them," Gao said in a statement on his ministry's Web site (www.mofcom.gov.cn).

Mattel has two sprawling plants in Guanyao, an hour's drive south of Guangzhou, capital of the booming southern Chinese province of Guangdong, but it was not immediately clear if they were connected to the tainted toys.

"I've heard others talking about this," one young worker told Reuters as heavy lorries, cement mixers and cargo containers rushed by on the dusty road between Guangzhou and Foshan. She did not elaborate.

Mattel said on Wednesday the toys were made by a contract manufacturer using a non-approved paint pigment containing lead.

Lead paint has been linked to health problems in children, including brain damage.

Mattel is asking U.S. consumers and sellers to return 967,000 plastic toys and is recalling another 533,000 from other countries, including Britain, Canada and Mexico.

Mattel's senior vice president of worldwide quality assurance, Jim Walter, said the recall could hit all its markets and traced the problem to a single manufacturer.

"The disappointment here was we had a single contract manufacturer that we had a long-standing relationship with, who did not do what is required by Mattel," Walter said.

"PR NIGHTMARE"

The recall comes amid heightened concern worldwide about the safety of China's exports. Many of the previous problem products have involved smaller manufacturers, but now a major company in a sensitive sector has been hit.

"Nobody wants to face that PR nightmare," said Kent Kedl, the Shanghai head of Technomic Asia, which advises companies sourcing out of China. "But the reality is that things slip through the cracks. And the cracks are a little bit bigger here in China."

Walter said the toy maker had launched an investigation. Mattel had stopped producing and shipping toys from that manufacturer, but said it would wait for the findings of the investigation to decide whether to keep doing business with it.

China has fought back against consumer concern by promising tough quality controls but also accusing foreign media of "alarmist" reporting that could stoke a protectionist backlash.

"Over 99 percent of China's export products are good and safe," Commerce Minister Bo Xilai said in Beijing on Wednesday, according to the ministry Web site (www.mofcom.gov.cn).

Mattel said it became aware of the problem in early July and was working with retailers to remove the toys from shelves. It also said it was intercepting shipments to avert further sales.

Of the nearly 1 million products recalled from the U.S. market, Mattel said about 30 percent had reached store shelves.

It declined to identify the manufacturer. In China, offices of Mattel's suppliers referred inquiries back to its head office.

President George W. Bush has ordered a review of U.S. rules intended to keep out harmful imports following a series of scares involving Chinese goods this year.

The United States has stepped up inspections of Chinese goods after a chemical additive in pet food caused the death of some pets. Toxic ingredients were also found in Chinese toothpaste and fish exports, while the deaths of patients in Panama were blamed on improperly labeled Chinese chemicals mixed into cough syrup.

Chinese-made toy trains were recalled in the United States in June because some may have contained lead paint.

Kedl, the consultant, said China was too important as a manufacturing base for foreign companies to abandon, but they were likely to tread more carefully.

"Multinationals will be more cautious, re-evaluating the cost of doing business in China, but no, they will not quit China."

(Additional reporting by Nicole Maestri in New York and Chris Buckley and Ben Blanchard in Beijing)