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Guangdong toymakers down but not out, association says

By Zhan Lisheng (China Daily)
Updated: 2009-03-18 09:13

GUANGZHOU: Even though the toy-manufacturing industry is going through a rough patch in the wake of the global financial crisis, most enterprises in Guangdong province will manage to survive the recession, an official of the toy association here said Tuesday.

"Guangdong's toy industry has been weathering hard times over the past couple of years, and it's going to get worse this year," Li Zhuoming, vice-chairman of the Guangdong Toy Association, said.

"However, I don't think enterprises will collapse one after another," he said.

Guangdong's toy exports, which account for over 70 percent of the nation's total, have seen a significant slump over the past few months, official statistics indicate.

"Last year, the production costs went up manifold as the prices of raw materials, labor and quality control went up. And then the financial tsunami struck and ravaged the sector in the second half of 2008," Li said.

"Overseas orders have nosedived, and the US and European Union have imposed trade barriers on China's toys. Things won't be looking up this year at all," he said.

Li added that enhanced technological thresholds that have recently taken effect, too, will make life difficult for toy makers as testing will become "enormously costly".

"Some small and medium enterprises might have to close down. But I don't think the scale will be massive," he maintained.

He said the reason he believed that was because the provincial government "has offered billions of yuan worth of financial aid and other preferential policies to support the Hong Kong/Taiwan-funded toy firms", and that the huge domestic toy market can prove to be a savior.

"A huge number of toymakers in the province have applied for booths for the upcoming 2009 Guangzhou International Toys and Gifts Fair in April. It clearly shows toy manufacturers here can whether the downturn," he said. "Their enthusiasm also reflects the trend that export-oriented toymakers are now focusing on the domestic market."

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