There is a reason that the US stopped using lead paint on children's toys and in interior paint. It is very dangerous. Many children died from eating paint chips. A 4 yr old from right here in MN died from swallowing a charm with too much lead in it just last year. However, ingesting small amounts of lead over a period of time is actually the greatest concern...like what could happen from a baby always sucking on a toy with lead paint. So, it is not *just* media sensationalism. Of course the media is hyping this to the max, but that doesn't mean it is not a serious issue.
The best way to get China to stop putting lead in toys is to stop buying them. There are some wonderful independent toy stores here in the Twin Cities (Peapods, Wonderment, and Creative Kidstuff come to mind) where you can find safe alternatives (CK does have some made in China stuff, but also alternatives). Even better, you'll be supporting the local economy to a much greater extent than you would be by shopping in a chain or online. Another way is to CALL YOUR LEGISLATOR and let him/her know that you want stricter standards. They will make this a priority if they start hearing from their constituents. A handwritten note is also a good way to send them your message.
As for me, I haven't banned toys made in China entirely, but have chosen to not purchase anything from dollar stores, no cheap little trinkets, no toys that are small, painted, or might be chewed on by my baby. It's just not worth the risk. And even if it turns out that every single toy that I could have bought but didn't is safe, I still feel better about supporting my local independent retailer.