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Hong Kong: Day 5
January 8, 2008
Since arriving in Hong Kong I have been writing about upward pressure on prices so my eye was caught by an article in The Standard, a Hong Kong based Newspaper. The headline was “Yuan appreciation seen as tool to cool economy.” Written by Katherine Ng, the article states that economists are “…forecasting at least a 10 percent rise [of the Yuan] against the US dollar this year and 7 percent next year.” The reasons for the projected increases are a need for the China to slow inflation.
On the safety front, I spoke with a highly respected member of the toy community who expressed some frustration and concern over the vagueness of what kinds of testing are going to be required. It seems that retailers have made some strong statements about large scale testing but have not quantified for manufacturers exactly what that means in terms of protocols. Time and cost will continue to be uncertain until this is settled.
The individual went on to say that complicating all of this is the entry of the Chinese government into the safety issue. Toy manufacturers will now be dealing with bureaucracies from two governments (their own and China). This could mean slow downs and increased pricing due to increased paperwork and redundant testing.
This kind of uncertainty can lead to a dampening of spirits and as a result a self-fulfilling prophecy of reduced sales. So, for the sake of getting costs and timing nailed, I hope to see retail community come together and lock in on some standards and protocols and communicate them to all manufacturers. In addition, it is hoped that the governmental bureaucracies will do as much as possible to increase safety assurances while at the same time impeding the flow of goods as little as possible.
Posted by Richard Gottlieb on January 8, 2008 | Comments (0)
