October 25 sees the opening of Autumn session of Canton Fair, 2007. When China’s toy industry has been haunted by the recalls in the U.S., less buyers visit toy hall this year. At the same time, quotation of toys is generally raised to some extent. However, buyers from Europe and U.S. are willing to pay more for products that come with better quality.

Still maintaining their confidence in market prospect, toy companies believe that in the coming years, China’s toy industry will continue to have its momentum. Export next year is expected to grow as well.

Fewer buyers

Throughout phrase two of Canton Fair this year, toy business has not see upsurge. When visiting toy hall, we find that, though most of booths had received some foreign visitors, it appears to be somewhat cheerless when not so many orders have been made. Quite a few of exhibitors say that, fewer purchasers came to autumn session this year. A toy merchant from Shantou, Guangdong even complained that, his buyers are only half of those in previous years.

However, some exhibitors think that, visitors to autumn session are always fewer than those to spring session, since buyers will make orders for Christmas. It is not all the negative result of recent recalls. At present, buyers trend to contact with makers after back home, instead of directly make orders. Therefore, Canton Fair becomes an opportunity of enhancing relation with old clients and seeking new buyers. How many business card you receive on fair might be a reflection of the effect of your exhibition.

Rising cost drives up quotation

In fact, US’s recall does not affect so much on export, but cost of toys are driven up by strict inspection process, higher expenses on raw materials and wage of worker, which imposes great pressures on companies. To offset higher cost, exhibitors increase their quotation on export by around 10 percent.

Chen Jinxuan, manger of Shantou-based Wanshun Toys tells TOY INDUSTRY that, labor force limits the development of toy business, which belongs to labor-intensive industry. Though wage standard has been raised, makers still find it difficult to employ enough workers. On the other hand, price rising of raw materials and alternating of foreign exchange have boosted cost to rise by large margin. After careful consideration, China’s toy makers believe that a 10-percent higher quotation is already a percentage that could be afforded by buyers. It is an attempt to offset the rising cost.

On the first day when second phrase of Canton Fair began, new quotation level was above the comprehension of buyers. But after a few days’ investigation, they trend to accept the increase.

Uncertainty exists in export to US

According to regulation, every item of goods exported to US should go through spot test. However, only three of testing center that authorize by government are situated in Guangdong. Mr. Lu with Jieyang-based Defa Toys tells TOY INDUSTRY that, now there is already a long line for goods waiting for test. If they fail to complete the testing procedure, they would then fail to make shipment on time according to the time set in contract. Toys exported to Europe go smoothly, Lu says, but those to US face uncertain factors. Moreover, since each item has to go through spot test, it is not a light burden to companies.

After the recalls, commodities inspection becomes stricter obviously, says Zhang Xiang, who works with Hengxin Foreign Trade Co. Ltd, situated in Yancheng, Jiangsu. Increasingly more products have to be reworked after fail to meet inspection requirement. They are not allowed to be exported until being sent to go through test once again. Furthermore, it is stipulated that all factories must have their own inspection facilities, resulting in higher cost as well.