This is a real Chinese toy, or at least it was made in China by a Japanese company.
If I had written something describing this you would not have believed me. But now when I write about weird stuff I see here you will have less tendency to doubt me.
They do sell some questionable items as toys here, all with parents' approval. All schools have stores surrounding them catering to the needs of China's youth. Everything from paper and pencils to junk food and toys. And not the wimpy kind of toys you see in America. We're talking toys that shoot pointy projectiles. Toys that cause hearing damage. Laser pointers. No, really. They sell laser pointers to kids as toys. As you can see in the video, toys that shoot flames. Toys painted with lead based paint that shoot flames and pointy projectiles! They probably have something that glows in the dark, made from radioactive waste, that shoots flaming pointy projectiles at deafening noise levels, that you can aim with a laser sight. Tasers for tots! OK, I'm making some of this up.