Exports slow as toy factories quit market

Toy exports from China’s market leading Guangdong province slowed considerably in the first half of 2008, according to a report this week by China Business News.

According to CBN, the good news for China's toy business was that the country's overall toy exports rose 2.1 percent from January through July of this year to $4.18 billion. The bad news: that figure was off pace from the comparable period of 2007 by 22 percentage points. And the decline among Guangdong-based exporters was even larger: a whopping 39 percent.

The data were compiled from export records compiled by Guangzhou Customs from 1,404 toy-related businesses in Guangdong during the period. Of those companies, 374 were reported to be new to the market. But compared to the same period of 2007, there were 3,618 fewer toy-related enterprises exporting products, a nearly 78 percent drop.

As the total number of exporters shrinks, there have been signs of consolidation. CBN’s report said four firms, with combined exports of $710 million, represented 24 percent of total exports. By comparison, the 3,600-plus exporters no longer in business in 2008 represented a combined 7.8 percent of the market.

The troubles in China’s toy export market were attributed to rising costs for labor and raw materials, shrinking export tax rebates, an appreciation of China’s currency and a struggling U.S. economy. Also impacting the business, particularly in Guangdong, were overseas purchasers transferring orders to toymakers to other areas of China and/or out of the country entirely.