See bottom of article for test results in full

THE forgery of British safety certificates is rife among Chinese factories exporting toys to Britain, according to businessmen involved in the trade. They say the frauds include altering the date of tests on toys and using computer graphics to change “fail” to “pass”.

“Fake certificates are rife,” said a British buyer who sends millions of pounds of goods to the UK every year.

The certificates, coded EN71, are required for all toys to protect children against the danger of toxic paint, sharp edges and small parts that a toddler could swallow.

Thousands of Chinese toy factory workers have just lost their jobs after the American giant Mattel recalled 18m toys, including Barbie dolls, because of lead paint and small magnets that a child might choke on. It had earlier pulled 1.5m toys from the shelves.

The US distributors of Thomas the Tank Engine were forced to recall more than 1m wooden trains, all because of lead paint.

It added to a disastrous few weeks for the “made in China” brand after the exposure of fake diabetic test kits made for Johnson & Johnson and the discovery of baby bibs contaminated with lead at Toys R Us.

Anxious British companies are now examining the documentation for millions of toys already on the high seas to reach Britain in time for Christmas, say exporters in China. The items were loaded onto ships bound for Britain before the Mattel scandal broke.

“There’s panic in the industry,” said a British businessman who spoke on the condition he was not named. “We’re handling dozens of e-mails every day asking about the safety certificates.”

Many companies know that counterfeiting, fraud and the use of toxic materials are endemic in the Wild West money-making atmosphere of China.

Certificates in China are usually issued by one of the three highly reputable international inspection firms, SGS, Intertek and Bureau Veritas.

A factory receives the certificate after supplying a sample product to be tested to ensure it conforms with European Union regulations.

All the main inspection firms provide customer hotlines for purchasers to check the validity of certificates against a register. But many buyers never bothered to check with the issuers, several businessmen claimed, focusing mainly on the price.

A plastic toy that is sold to a British consumer for 99p typically costs just 22p when it leaves the Chinese factory, making the margins attractive for everybody except the manufacturer.

When the cost of raw materials is deducted, the factory may get as little as 7p to cover labour, overheads and profits. That is why the Chinese manufacturers are tempted to cut corners. Lead paint gives the toy a brighter, glossier look – and is also almost half the price of safer paint, the businessman said. “Red and orange are the giveaway colours and they are also the ones which most often fail the safety tests,” he said.

The bustling wholesale markets of southern China are places where almost anything can be done at a price.

“Okay, what certificates do you want for Britain?” inquired the vendor of bright red die-cast London buses at the Yidelu wholesale toy market in Guangzhou. “We can provide anything you need in a day or two. Just let us know what you need to see. Anyway, we have the Chinese state bureau certificates, so you don’t need to worry about safety.”

Other vendors displayed outdated certificates from SGS and suggested that obtaining an updated version might not take longer than a visit to the digital printing shop downstairs.

Days after the Mattel scandal, there was also evidence in Yidelu that the company was not in control of its branded products from China. One Chinese vendor sold The Sunday Times a sample of Barbie with Cinderella slippers, falsely labelled “made in Indonesia”.

The doll appeared to be a genuine Mattel product destined for the worldwide market and listing Mattel UK in Maidenhead on its packaging.

“It’s made here in Guangdong province. I’ve got no idea why it says Indonesia,” the vendor said. “Maybe something to do with taxes or quotas. It’s not a counterfeit.” The Chinese media itself has exposed far more dubious practices. A report on May 31 by the online news service Jin Shi investigated why children in the city of Yangzhou were breaking out into unexplained skin rashes after wearing cheap new clothes.

The reporter found the wholesale vendor, who admitted that the T-shirts were made from recycled hospital refuse. Chinese call such apparel “black heart clothes”.

Jin Shi reported that Yangzhou trading standards officials warned parents that unscrupulous factories were also making soft toys from hospital rubbish – but contented themselves with advising families that any such toys “should be sterilised in alcohol” before being given to children.

In the city of Changsha, officials seized 1,000 crystal balls for children after tests found that they contained a poisonous clear liquid. One British buyer tells of an occasion when his company opened a hollow toy duck to check the ballast that weighted it for play. It contained smelly toxic mud.

While consumer scandals are everyday fare at home in the fast-developing Chinese economy, their effect worldwide on the “made in China” brand could be calamitous and provide ammunition for protectionism.

The latest worry concerns China’s food exports, as a deadly virus sweeps through the nation’s 500m pigs – no small matter given that China is now the world’s fourth largest exporter of pork.

The damage to China’s international prestige comes at a politically sensitive moment, as the nation prepares to host the 2008 Olympic Games and the Communist party is just weeks away from its 17th Congress, at which a new generation of leaders will emerge. The government response was slow and defensive, perhaps because President Hu Jintao was absent from Beijing at an antiterrorism summit with Russia’s Vladimir Putin.

Results of tests on eight items of jewellery found to contain high levels of lead

Batch 1: Items bought from jewellery stalls in London and Birmingham

Key

Item 2: Necklace and heart bought from jewellery stand in Oxford Street, London

Item 3: Necklace with bear pendant bought from Camden market, London

Item 5: Z-shaped pendant bought from stall in Piccadilly Circus, London

Item 6: Cross and necklace bought from St Martin's market, Birmingham

Batch 2: Items bought from Hamleys, London, and Monsoon Accessorize

Key

Item A5: Pink pendant bought from Monsoon Accessorize

Item A2: Skull and crossbones bought from Monsoon Accessorize

Item H3: Bracelet bought in Hamleys

Item H8: P-shaped pendant bought in Hamleys

Times recommends

• Ingrid Betancourt's homecoming
• Geraint Anderson: Trust me, greed ain’t good
• The 10 best campsites in Greece