Good morning and happy new year to everyone.

Mr. Shing, thank you for that kind introduction. It is great to be back in Hong Kong at the largest toy fair in Asia.

Being here in Hong Kong to start the new year says a lot about where the Consumer Product Safety Commission’s focus and attention will be in 2011.

We are coming off of a very good year at CPSC. Toy safety was both a top priority and a success story in 2010 and it will continue to be a priority in 2011. Working directly with our stakeholders in Asia was a priority last year, and as my presence here today shows, it will continue this year.

Another priority is for CPSC to be more proactive in anticipating product safety issues, which is a key part of our new strategic plan. I talk about our strategic plan later in my remarks.

Now the new designs and trends seen at the fair this week are likely to influence which toys children are asking for and playing with in 2011. This is because the designs seen at the fair will result in toys sold in the United States.

With more than $20 billion in toys imported into the U.S. from this region each year, all eyes are on this toy fair.

Now I know that manufacturing and purchasing decisions for the Christmas season are made many months in advance. As a result, I want to talk about what must be done today to ensure that consumers have a safe toy shopping experience throughout the year and especially during the 2011 holiday season.

But first, I would like to spend a minute looking back.

In 2008, there were 172 toy recalls in the United States. These recalls exposed breakdowns in the industry and undermined consumer confidence. I know it is starting to become outdated to talk about the wave of toy recalls of 2007 and 2008, but it helps us measure the progress that all of us are making.

Solid progress that first started in 2009 continued through 2010, as fewer and fewer models of defective toys were found in our marketplace.

The number of toy recalls dropped from 172 in 2008 to 50 in 2009, and it dropped again to 44 in 2010.

The numbers are moving in the right direction.

Only three of the 44 toy recalls last year were the result of lead violations. Those three recalls represented a drop from nine in 2009 and 19 in 2008. Now that’s progress.

I am pleased that the toy industry has responded to the calls for compliance with U.S. lead regulations.

The results of the changes made by your industry in the supply chain and in testing are helping to restore the confidence of American parents—confidence that lead is not being added to toy paints or substrates.

I appreciate that your industry takes the danger that lead poses to children seriously and is making the necessary investments to move away from lead.

It is critical that there be no let down in this effort in 2011.

While lead was less of a problem last year, CPSC still announced far too many toy recalls due to design flaws.

We had incidents involving handles breaking free from toy riding cars, sending children rolling away from their parents.

We had young girls and young boys suffering unfortunate injuries to sensitive areas because of protruding toy keys on trikes and exposed motorized parts on toy submarines.

As we see each year, there were recalls because of small parts coming loose and posing a choking hazard to young children. Small wheels and valves on toy cars and balls should not be breaking off toys.

You cannot simply label away the risk that small parts can pose to young children who enter into the play area being used by an older sibling.

The issue of small parts has always been a top concern for CPSC. It is a top concern because we expect compliance with the long standing federal regulation and because choking is one of the leading causes of toy related deaths in the U.S.

The small parts regulation has been in place for more than 30 years and there are child safety organizations in the United States who no longer believe it is adequate.

There have been incidents of children choking to death or nearly choking on parts of toys that were slightly longer than the current requirement.

It is important to know that at CPSC we are not limited to just violations of the small parts requirement to recall a toy because of a choking risk. In the past four years, we have recalled toy tool benches and workshops after both were found to be hazardous. Both toys had toy nails that choked children and were slightly larger than the standard.

If a fresh look at this issue is needed, I will not hesitate to ask CPSC’s outstanding cadre of experts in child behavior and physiology to provide a recommendation to the Commission.

Many of the recalls and safety issues that arose last year are tied to a theme I have spoken about each and every time I have visited Asia.

Manufacturers need to design out product hazards and build in safety.

Building safety into a toy means always following the appropriate mandatory and voluntary standards. That includes the mandatory toy regulation in the United States.

It is important to also consider foreseeable use and misuse of a toy, beyond what the standard addresses. This is the only way to ensure that the toy maintains its integrity and safety.

Let’s consider those toddler tricycles I was talking about earlier. Instead of the trikes having a protruding toy key very close to where a child is seated, it should have had a more rounded, flush design. The recalling company eventually came up with this design as part of its repair program.

My point is, I do not want 10 young girls to have to get hurt on a popular toy before a safety risk and safety solution is identified.

Prevention must win out over reaction—from manufacturing to distribution, the toy industry must work to prevent injuries by taking every step possible to build safety into toys.

I trust that many of you here today operate companies with a mission and commitment to the safety and well being of your customers. And I understand that the pressure on all of you to adhere to various requirements from around the world continues to expand.

The Europeans have strict requirements, the Canadians just approved new lead and product safety requirements, some states in the US have adopted strict lead and cadmium requirements, and China is establishing tighter controls on product quality and testing.

At the CPSC, we are in the third year of implementing the Consumer Product Safety Improvement Act. This law has made CPSC a stronger and more respected regulator in the global marketplace.

Although there have been some understandable complaints and concerns expressed about the CPSIA, there is no denying that it has been a positive for children and for all consumers.

Here is another reason why it is so important to completely eliminate the use of lead: the CPSIA mandates that the total lead content limit in toys will drop to 100 parts per million in August—except where the Commission finds that a 100 parts per million limit is not technologically feasible.

We have already solicited and will continue to solicit comments and insights from key stakeholders, including the toy industry on the issue of technological feasibility prior to making our final decision.

One year ago today, I delivered a speech by video to this very same assembly.

I guess it is becoming a tradition to speak to this group on January 12. Maybe I should plan to celebrate new year’s eve here.

During my speech last year, I made the following statement:

“Let me take a moment to make a prediction early on in 2010 related to [ASTM] F-963. I believe that the heavy metals cited in F-963, especially cadmium, are going to attract attention in the United States from consumer advocates, the media, and parents. I would highly encourage all of you to ensure that toy manufacturers and children’s product manufacturers in your country are not substituting cadmium, in place of lead. All of us should be committed to keeping hazardous or toxic levels of heavy metals out of surface coatings and substrates of toys and children's products.”

Well, my prediction came to pass.

There was quite a bit of attention given to the risk posed to children by cadmium, but it was not focused on toys. Instead, the attention was on children’s metal jewelry and decorative drinking glasses.

In response to that attention, we turned words in action. We recalled thousands of pieces of dangerous metal jewelry, we turned away dangerous jewelry at U.S. ports, and we established new science on the acceptable daily intake limits for cadmium.

The focus on metal jewelry does not mean we should gloss over cadmium in toys. And it does not mean anyone should gloss over my admonition from last year about not substituting cadmium in place of lead. My words last year still apply this year.

In fact, officials from AQSIQ sent the same cadmium warning to manufacturers of children’s products just a few weeks after my remarks were broadcast.

There should be no letdown in the effort to keep cadmium out of surface coatings and substrates in toys.

Again, our goal is to be proactive at CPSC. Cadmium is not a crisis in your industry right now, but we need to act in ways that prevent it from becoming one in the future.

To stay ahead of this issue, CPSC is focusing on the standards for cadmium.

Scientists at CPSC are assessing whether the surface coating limit of 75 parts per million in F963—which is a mandatory requirement in the United States—is adequate.

Technical staff at CPSC are also working with the ASTM voluntary standards group for toys to establish a new extraction limit for cadmium in the substrate of toys.

I hope that the people in this room will join me in encouraging the swift development of a strong standard for toys.

This combination of requirements is intended to establish safeguards for the future—a future that does not expose children to cadmium in toys.

As I stated last year, all toxic metals need to come out and stay out of toys.

The time is right to expand our vision beyond lead and cadmium, because the CPSIA addresses more than lead and cadmium.

Antimony, arsenic, barium, mercury, chromium, and selenium are in our sights.

Like lead and cadmium, these are bad metals for children to be exposed to and there is no good reason to use them or allow them to be introduced into the manufacture of toys.

I am calling upon all manufacturers, exporters, and retailers of toys to take the necessary steps to ensure that final products do not contain these or other harmful metals or chemicals.

CPSC staff is actively engaged in scientific work aimed at putting us in a leadership role to address these dangerous metals.

We want to have sound scientific evidence before we move to the next step.

Just as with cadmium, the CPSIA has set requirements limiting the use of antimony, arsenic, barium, mercury, and chromium in surface coatings on toys.

But, let me be clear, I intend for CPSC to explore ways for the United States to go beyond surface coating requirements. We should also strive to limit children’s exposure to these metals from the substrate of toys.

I would like to turn to another important requirement spelled out in the CPSIA: product testing and certification.

I know this is source of concern for many of you here today and I have been attentive to the concerns expressed here in Asia and in the United States.

I do believe that the independent testing and certification requirements for lead paint have helped contribute to the reduction in recalls and the increase in consumer confidence.

Retailers in the United States have a means of ensuring that they are selling toys that comply with the law.

And parents can be assured that safeguards are in place to protect their child as they look at a toy on a store shelf.

CPSC staff has worked very hard to recognize accredited labs that have proven they have the technical expertise to test to the U.S. lead paint requirement. 265 laboratories from around the world have been recognized—including labs in Asia—to perform third party testing of paints and surface coatings.

Again, CPSC staff has put in a lot of work to recognize accredited labs that can test to these individual requirements.

If you go to our website—www.CPSC.gov—you can actually see which labs have been recognized to perform certain types of testing.

There are other toy related issues beyond lead paint that require independent testing and certification, including electrically operated toys and small parts.

Again, I believe that these testing and certification requirements will continue to contribute to the reduction in recalls and the resulting increase in consumer confidence.

From the start of my tenure as Chairman of the CPSC, I said that I would be a firm, but fair, regulator. I believe part of being fair to all of you is making sure you know what the staff at CPSC is working on that could impact your business.

My visit to Hong Kong is part of this effort. Another critical component is CPSC’s creation of an Office of Education, Global Outreach, and Small Business Ombudsman. Establishing this office has been a priority of mine for quite some time and the Commission approved its creation last September.

Through the excellent work of our Global Outreach team, including the establishment of our first foreign presence in Beijing, we are looking to bolster our presence in Asia this year.

The new Office of Education, Global Outreach, and Small Business Ombudsman will coordinate and provide education and outreach activities to international stakeholders, including manufacturers, importers and foreign governments.

We realize that many manufacturers may not know where to turn for information on our regulations or might experience difficulty accessing the information they need to fully address safety in the manufacturing process.

I've been in enough meetings with associations and companies to know that sometimes even the experts disagree on the interpretation of a regulation.

I believe that by enhancing CPSC’s ability to address the questions and concerns of the regulated community, our agency can facilitate the transfer of knowledge across industries. This, I believe, will ultimately create safer products through better educated manufacturers.

The Office of Education, Global Outreach, and Small Business Ombudsman has the potential to increase our focus on important issues, such as quality assurance in the manufacturing process. CPSC has long believed that enhanced quality assurance programs assist manufacturers in producing products that comply with relevant safety standards.

As I stated, this new office will aim to work with both industry and regulators. During my travel overseas, I learned early on how much foreign governments rely on the United States as a partner in developing their product safety systems.

I had quite a memorable trip to Hanoi within weeks of taking office. The Vietnamese government could not have been more welcoming. In fact, they would have been happy if some of our agency officials could have stayed for a few months to help companies in their country learn U.S. safety requirements.

We know that there is a small shift occurring, a shift that is leading certain manufacturing sectors to transfer some of their factories to countries like Vietnam and Bangladesh.

We need to be ready to partner with these countries so that the import problems we have already experienced do not materialize again.

This new Office of Education, Global Outreach, and Small Business Ombudsman will serve as a coordinated business unit to carry out this activity and allow CPSC to enhance its outreach to the international community generally.

By partnering with foreign regulators, we can boost their efforts to develop effective product surveillance strategies, product testing methods, and voluntary and mandatory product safety standards.

I am very excited about the potential of this new office.

We are on the verge of great things at CPSC in 2011, as this will be the first full year of implementing CPSC’s new, five-year strategic plan. This plan is designed to establish CPSC as the global leader in consumer product safety.

The five goals of our Strategic Plan are:

Leadership in safety: we will establish ourselves as leaders in identifying and addressing the most pressing consumer product safety priorities and mobilizing action by our partners;

Commitment to prevention: we will engage our stakeholders to ensure that the products consumers purchase are as safe as possible;

Rigorous hazard identification: we need to ensure timely and accurate detection of consumer product safety risks;

Decisive response: we will use our full range of authorities to quickly remove hazards from the marketplace; and

Raising awareness: we will promote a public understanding of product risks and CPSC capabilities.

This new plan was developed with significant input from industry stakeholders, consumer groups, and CPSC staff. It builds upon a vision of a CPSC that is more focused on injury prevention and a CPSC that works proactively with global manufacturers and suppliers to build safety into their products.

I have focused a lot on these two themes today because I believe lives can be saved and injuries can be prevented if we are proactive and collaborative.

If we are partners in this effort, I believe that we can build upon the progress that has been made in recent years.

Progress that will help us move together to further reduce toy recalls.

Progress that will help us move together to reduce toy related injuries.

Progress that will help ensure a safe holiday toy shopping season for consumers in the United States and around the world.

CPSC stands for safety and I know that if each of you stand with CPSC, we can make 2011 a great year.

Thank you all for you time today and congratulations on another great toy fair.