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

China Daily (Canada) - - BUSINESS -

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

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