Toy factories face fight for survival
Producing more than $453m worth of goods annually, companies in one county are adapting fast to change, reports Xu Wei in Yunhe, Zhejiang
Every year, as parents select the Christmas toys that could make them the world’s best Momand Dad, fewwill realize that the machines that made them, or the workers that packed them, were probably from eastern China. More than 90 percent of the wooden toys produced in Yunhe county, in eastern Zhejiang province, are exported to the EuropeanUnion and theUnited States.
With a toy production history dating back 40 years, the county now accounts for onethird of China’s wooden toy exports.
Its 732 toy-making companies manufactured more than 2.77 billion yuan ($453.1 million) worth of toys last year, however, new challenges are mounting, most obviously the rising cost of labor and stagnating global demand.
“The time has passed when wooden toymakers made high and quick profits,” said Lin Hongbing, chairman of ZhejiangHongyuan Toy Co.
“Workers’ wages are increasing by 10 percent each year, and it is impossible for us to raise the price of our products by that,” he said.
Lin said that other costs, too, are rising, such as transportation and electricity. “Inevitably, as a result profit margins can only go lower and lower.”
Statistics from the General