Chinese Toys

Via an article by John Derbyshire, I became acquainted with the huge number of safety-related recalls of Chinese-made toys:

China by far leads the list of countries making products that are recalled in the United States, accounting for 65 percent of all the recalled products in this country this year, according to CPSC. In 2006, China accounted for 233 product recalls -- nearly double the rate from the previous year, with lead a recurring cause among the recalls.

Who pays for this? Virtually all of Chinese manufactures are marketed and distributed in the U.S. under domestic labels. So when Thomas the Tank Engine has to be recalled because the Chinese painted him with lead-based paint, I expect RC2 Corporation (American) has to issue the refunds. Can RC2 then recoup this money from the Chinese factory that made the toy? What is RC2's legal recourse? To sue in American courts? Against what attachable assets? To sue in Chinese courts? Ha! "Sue in one hand, crap in the other . . ."

No foreign company can own property in China directly; it can only do so via joint ventures under Chinese control. So American money flows into China to build the factory, American money flows into China to buy what the factory makes, and the U.S. gets . . . poisonous toys.

Maybe someone can explain to me a scenario where America doesn't get screwed.