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Nearly 1,000 toy exporters shut down in Guangdong

PRODUCT recalls, rising production costs and the global financial crisis forced almost 1,000 toy exporters in Guangdong Province to shut down last year.

Huangpu Customs in the province said 922 toy exporters in Guangdong closed operations in 2008, while by the end of 2007, 3,089 were operating there.

Dongguan, the province's leading toy base, had more than 4,000 factories and some 2,000 suppliers at its peak in 2001.

The numbers began to drop about two years ago.

Rising prices for raw material and labor, along with stronger Chinese currency raised production costs by 25 percent for most companies, said Li Zhuoming, head of the Guangdong Toy Association.

Large quality recalls by international toy giants, including Mattel Inc., also hurt the industry as Western countries raised standards to ensure toy safety.

The financial crisis compounded the situation as consumption fell and fewer orders came in.

Just in Dongguan, about 20 percent of the small toy factories closed last year, Huangpu Customs said.

China is the world's largest producer and exporter of toys, with Guangdong alone contributing about 70 percent of the overall output.

In 2008, Guangdong exported US$6.1 billion worth of toys, up 3.6 percent from 2007. The growth rate for 2008, however, was 19 percentage points smaller than that in the previous year.


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