The reshuffle of Guangdong’s toy industry gradually stabilizes

Beginning in the second half of 2007, Guangdong’s toy exports began to fluctuate violently, with export volumes fluctuating sharply and the number of exporting enterprises decreasing significantly. After a round of “shuffle”, the current survival situation of enterprises has stabilized. A number of enterprises have withdrawn from the export market. The trend of enterprise large-scale is obvious. Enterprises with truly high management level have gained new vitality.
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                                                                                                                                              Toy exports are gradually stabilizing
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​ ​​According to the analysis of customs data, although Guangdong’s toy exports have fallen sharply since 2008, they still have a growth of 6.3%, and there are signs of recovery in the third quarter. According to Guangzhou Customs statistics, Guangdong’s toy exports in the first three quarters of 2008 were US$4.47 billion, an increase of 6.3% over the same period in 2007, and a growth rate that was 16.2 percentage points lower than the same period in 2007.
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The second half of each year is the peak season for toy exports, and 2008 is no exception. Entering the third quarter, Guangdong’s toy exports also experienced a cyclical and steady rebound. Compared with 2007, due to the reduction in the export tax rebate rate from July 1, 2007, companies rushed to export in the first half of the year, while exports fell back significantly in the third quarter. In 2007, the export base was low. In September 2008, Guangdong’s toy exports increased significantly compared with 2007. Exports in a single month were US$840 million, an increase of 17.7% over the same period in 2007, becoming the month with the highest export volume since 2008.
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                                                                                                                                                Exports in processing trade, dominated by Hong Kong and Taiwan enterprises, are still growing, while exports in general trade, in the main body of private enterprises, have declined. According to customs data, Guangdong’s toy exports through processing trade in the first three quarters of 2008 were US$3.15 billion, an increase of 4.8%. The growth rate was 17.6 percentage points lower than the same period in 2007, accounting for 70.6% of the total toy export value; general trade continued to decline, with exports of 5.3%. billion, down 6.6%. Correspondingly, in the first three quarters of 2008, the exports of foreign-invested enterprises increased by 9.3%, the exports of private enterprises fell by 2.2%, and the exports of individual industrial and commercial households dropped significantly by 66.7%.
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So far, in this round of economic downturn, large enterprises have shown strong ability to resist risks. From the changes in the number of toy export companies in Guangdong, it can also be seen that the “big waves washing away the sand” style reshuffle in this industry is underway.
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Since 2007, two major events have had a key impact on toy exports: First, in July 2007, my country adjusted the export tax rebate rate on a large scale, and the toy export tax rebate rate was reduced by 2 percentage points; second, in September, there were two consecutive incidents of multinational companies targeting Chinese toys. In response to the recall incident, my country has taken the initiative to adjust the toy industry, and the quality supervision department has increased supervision and does not allow a group of small and non-standard enterprises to engage in exports. A large number of companies in Guangdong have had their export licenses revoked, which has resulted in a sudden decrease in the number of toy companies (including manufacturing companies and trading companies) with export performance since the second half of 2007.
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​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ In 2008, Guangdong toy export companies fell into difficulties such as the US subprime mortgage crisis and rising production costs. Comparing the first three quarters of 2008 with the same period in 2007, the number of companies with actual export records of toys decreased from 4,820 to 1,554. After a round of reshuffle, the number of toy export companies in Guangdong has tended to be relatively stable since the second and third quarters of 2008, and at the same time, companies have become more and more large-scale.
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According to customs data, in the first three quarters of 2008, there were 77 companies with exports of more than 10 million U.S. dollars, 7 more than the same period in 2007. The total exports were 2.9 billion U.S. dollars, an increase of 15.6%, accounting for 10% of Guangdong’s total toy export value during the same period. 64.9%. In other words, since 2008, more than 60% of Guangdong’s toy exports have been exported by the above-mentioned 77 companies. The exports of small and medium-sized toy companies have dropped significantly. There are 1,087 companies with exports of less than one million US dollars. The total exports of these thousands of companies are only US$200 million.
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&n#p##e#bsp; The financial crisis will not lead to a “wave of bankruptcies”
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It is worth noting that although large enterprises have strong ability to resist risks, they are inevitably affected by market fluctuations. In the first three quarters of 2008, among the enterprises in Guangdong with toy exports of more than 10 million U.S. dollars, 8 enterprises experienced a decline in exports of more than 10 million U.S. dollars. 20%. These large enterprises are also facing the problems of reduced orders, layoffs, and contraction.
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As an entertainment consumer product, toys are bound to be the first to be impacted when the economic environment is sluggish. Since 2008, the main markets for Guangdong’s toy exports have shrunk. In the first three quarters of 2008, the top three export markets for Guangdong toys were the United States, the European Union, and Hong Kong.��Accounting for 75.8% of Guangdong’s total toy export value. Among them, exports to the United States and Hong Kong declined, with exports of US$1.86 billion and US$410 million respectively, down 2.5% and 13.9% respectively. Exports to the EU also fell significantly.
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The recent closure of the Hejun Toy Factory in Dongguan, Guangdong has resulted in more than 7,000 workers losing their jobs. This incident has caused strong repercussions in the Guangdong toy industry. Li Zhuoming, president of the Guangdong Provincial Toy Association, believes that although the market environment is indeed relatively harsh, the international toy market still exists, and Guangdong’s toy exports are also becoming stable, and large-scale bankruptcies and closures will not occur.
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Some toy companies believe that Dongguan Hejun Toy Factory should be treated as a case study. Hejun has problems in the capital market, rather than going bankrupt due to reduced orders. Starting from November 1, my country will increase the export tax rebate rate for some labor-intensive, high-tech, and high value-added commodities. The export tax rebate rate for toys will be raised again from 11% to 14%. The implementation of this policy will undoubtedly have an impact on The recovery of the toy industry has brought positive effects.