Reputations matter, even for China

In my talk at the Cato Institute today the claim that reputations don't seem to be important in disciplining China was very briefly raised. Anyway, talk about timing, here was a story that I just happened upon:

Whittle Shortline Railroad , a company in Louisiana, Mo., that makes wooden trains and trucks, posted a banner on its Web site several weeks ago: “100 percent kid-safe,” it read, “with lead-free paints.” Mike Whitworth, the company’s owner, said the recent recalls of Chinese-made toys found to contain lead in their paint has been good for his business. Very good. . . . .

Some evidence that it matters to consumers:

OTTAWA - Fears of shoddy and dangerous toys pouring into Canada from China are prompting parents across the country to seek safer alternatives following a large-scale recall announced by Mattel this week. But many are finding it's a nearly impossible task because the majority of the world's toys come from China.

"It's really difficult to find anything," said Keely Dennis, mother of a one-year-old boy in Vancouver. "It's really hard to find toys that aren't made in China that are age-appropriate, and are just cool, that your kid will play with."

For the second time in two weeks, the toy giant began recalling millions of Chinese-made toys over concerns that small parts could pose choking hazards and that excessive amounts of lead may be present. This is the latest in a string of problems that are raising doubts over the safety and quality of Chinese products, including toothpaste and pet food. . . . .