“We are withdrawing from China step by step. For toys of high quality, China is simply not a reliable source,” the Stuttgarter Nachrichten newspaper quoted company chief Martin Frechen as saying.

Frechen said Chinese factories were not able to produce complicated models to the company’s standards or ship toys for which there was a strong demand to Germany in time. He said delivery times became a pressing problem when Steiff ordered 80,000 copies of its white “Knut” bear, based on the Berlin zoo’s popular polar bear cub by the same name, and the toys took three months to reach Germany.

Steiff, which was founded by a wheelchair-bound woman in 1800, began outsourcing production to Chinese factories in 2004, saying German producers could not compete in terms of cost.

The company sent 300 workers to China to oversee production, but Frechen said even so the Chinese producers fell short of standards. Steiff is battling to win back marketshare for its most famous product, a teddy with a button sewn into its ear, and Frechen said bringing production back to Germany was part of these efforts.

The company said if one of the bear’s eyes were placed a fraction too high or low, its melancholy gaze loses its appeal, the newspaper said. Steiff’s announcement comes less than a month after Beijing revoked the export licences of about 700 toys factories over safety failings.