Asia Insurance Review

The Western retailers that Chinese manufacturers supply are also being encouraged to examine every part of their supply chain, including knowing the third parties their principal Chinese suppliers are outsourcing the manufacture of any component parts to.

"If they're putting wheels on a product, they're getting the wheels from someone," said Mr Alan Schoem in a recent interview...

"I want to know who their vendors are, and I want to put it in the contract that they can’t change vendors without getting my okay."

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In a case this year, a Chicago toy company, RC2 Corp., estimated the cost of recalling 1.5 million Chinese-made Thomas the Tank Engine toys, which were found to have lead in their paint, will be between US$1-2 million.

Mr Alan Schoem recently said that he had observed recalls costing more than US$100 million during his 31 years at the CPSC, and that they can frequently cost companies in excess of US$10 million.