A lot of interesting views and ideas coming together in this thread.
Timotheos is of course absolutely right that China can, and does, produce high quality goods*, often at a fraction of the price of many other countries, when the specifications are right. Gepetto's headless nails example shows that often the fault is in the specification, not in the production quality. Assumptions may be made by Western companies, and the cultural differences do not allow for these. I am constantly trying to explain to people I work with that they should not make assumptions with new clients, but should have a written contract with all terms and procedures clearly stated.
The re-labelling and re-packaging of Chinese-manufactured goods suggests that there is still negative perception. Why should we care where something is made, as long as it performs its function to our required standards? Playmobil at least appear to be honest enough to maintain a "Made in China" label on these sets. As Tim says, the fault in these sets is not necessarily at the Chinese end, but may be in the specification, or in the quality control that surely should have spotted with chicken Dragon wings.
There is also the fear that Justindo refers to, that China is taking over so much manufacturing that old established manufacturers round the world cannot compete financially and go under. People don't necessarily want high-end goods, nor do they want to pay high-end prices. In the me-Generation, epitomised by Margaret Thatcher's yuppies in the 80s, visible consumption was a goal to aim for. This is still the case, but the location has moved from London and New York to Dehli and possibly Beijing.
Gordon points out that Playmo are looking for a lower cost per unit figure, and this can be achieved either through lower labour costs, or through improved automation. Either way this reduces the wage bill, but also reduces the monetary flow into the pockets of Western consumers who are buying Playmobil in the first place.
The current trend is that consumers (generally, not necessarily those of us here) want a cheaper product, not only because they know it's possible, but because they don't actually have the same disposable income anymore.
Playmobil has traditionally been seen (by us) as a higher-end toy. We know it lasts virtually forever, we know it can be detailed and include many parts and accessories. Is there still room in the marketplace for a higher-end toy, or are Playmobil being forced downmarket by factors beyond their control?
*an example is the manufacture of violins. In the 70s and 80s many very shoddy violins were coming out of China, and these poisoned people's opinions until quite recently, but Chinese-made violins are now much improved, and usually a fraction of the cost or a European model. There is still a general bias against them, but opinions are changing, albeit slowly. If you're interested you can read more here:
http://www.elidatrading.co.uk/thinkagain.htm
