TEXT OF INTERVIEW

Scott Jagow: In Hong Kong today, there was a big toy industry expo. All the talk was about how Chinese toy companies are rebounding from all those recalls last year. Give China’s government an assist. It launched a serious publicity campaign to assure the world that Chinese products are safe.

Let’s bring in our correspondent Bill Marcus in Shanghai. Bill, has that campaign worked?

Bill Marcus: The evidence is in the pudding. Year-on-year growth of $11.5 billion in first 11 months of 2007, according to government numbers, a 20 percent growth in orders month-on-month. So the way the association reads it, yeah, it’s working. The buyers feel comfortable enough coming back to the show.

Jagow: And what are Chinese toy manufacturers attributing their success to, then?

Marcus: The head of the Guangdong Toy Manufacturers Association, he said that that’s evidence that consumers have understood what China has been saying — that it explains why things went wrong, how they’re going to make it better. And that it indicates that there’s faith and trust in the manufacturers of toys in China.

Jagow: Bill, what are manufacturers saying about the price of toys for this year?

Marcus: They say get ready to pay a little bit more. There’s a new labor law that took effect on the first of January in China — that means that workers’ conditions and salaries and the benefits that are paid to them are going to go up. The cost of quality control, making good on all the promises, is going to drive prices up. And so will higher prices for raw materials.

Jagow: OK, Bill Marcus in Shanghai. Thank you.

Marcus: Thank you, Scott.