Cover Story China's toy industry may be seeing a brighter Christmas season. In two months this autumn 21 million China-made toys were recalled. While harmful chemicals caught media headlines, the majority of recalls were due to design faults. By October, toy exports surged 26.7 percent year on year, giving hope that the industry is on the rebound. While recalls hit some toy makers hard, they have given impetus to the further innovation and optimization of the toy industry.