The train wreck known as China’s manufacturing sector took another tumble down the hill as India imposed a six-month ban on toy imports – one of China’s largest exports. The setback for China underscores our ongoing warnings to investors that neither a multibillion stimulus plan or anything that Beijing throws at its ailing economy will promise investors those speculative profits of yesteryear.

“Made in China” is a hair-trigger slogan that would often ignite a tirade about lost jobs, junky products and sweatshop labor. Well, it looks like “Made in China” will be a relic of the past as the Communist Party goes up-market.

China is not immune to this global recession, says John Crooks. And as the ‘world’s manufacturing plant’ stumbles, it will take down many others with it. Emerging economies that relied on China buying raw materials will be hit hardest. And any developed nation with exposure to these markets will be dragged down too.

As the U.S. economy is slowing down, China’s manufacturing base is beginning to crumble. Rising cost, increasing exchange rates and sagging demand are forcing companies to close shop, or to outsource capacities to cheaper regions in Southeast Asia.