Financial crisis to U.S. retailers pessimistic expectations, the 2008 Christmas season fear will disappear. To do this supplier has also been word within the chinese factory.

    ”European and American guests Christmas 2008 orders reduced by 50%, and our orders have not been available the next.” A stuffed toy exporters told reporters that the market is very bad.

    More bad news is that Wal-Mart, Target and other international buyers to suspend the global procurement, unless the product must be purchased only. They removed a lot from October 2008 to next March’s orders.

    Order to reduce panic

    U.S. retail may not reproduce this year’s Christmas market in past years. Recently, the U.S. Commerce Department said retail sales in September fell 1.2% nationwide for the biggest decline in 3 years. United States financial crisis would worsen consumer spending.

    U.S. retailers cut orders for Christmas goods, including the Christmas tree, rattan, wreaths and toys. “We do have to reduce this year’s orders, because the company’s sales forecast for next year rather pessimistic, conservative, and the resulting poor sales last year, the backlog of inventory.” A major U.S. retailer’s procurement officers confirmed that they expected end of next year Before the market will see a rebound.

    Toy production in china accounts for 75% of the world’s toy industry has long felt the crisis orders. Gu Wu is a remote control toy exporters in shenzhen, with the eight previous years, 90 months worked on the Christmas orders is completely different, but now he felt a marked decline in orders. “This year at least 40% reduction in orders, while some recent large customer orders under the plan early on, and seven in August orders were received in October stopped.”

    And a wooden toy factory in Dongguan boss reflects the recent Wal-Mart, Target and other U.S. buyers, many orders are canceled. These large enterprises were originally planned to order a year.

    This year, China’s toy factories have no “Christmas.”

    Christmas gifts of toys made in Quanzhou, Fujian Shun Yan Jianhuang U.S. Group Export Department, said the absence of orders, Fujian many gifts and toys to the Inland Revenue Department reported that business stopped.

    Forcing the plant capital strand breaks

    In order to reduce the same time, the financial tsunami has caused the credit crunch to make large-scale factories have cash crisis strand breaks.

    ”Financial tsunami was the last straw that breaks the factory.” Pao toy factory in Shenzhen Mission Hills director Xue Xiaowei that the closure of many factories are now the biggest problem is funding strand breaks, not the cost.

    Funds are tight from the factory two aspects: First, bank loans, letters of credit before the plant can get to the banks for loans for the purchase of raw materials, but now banks are tightening export export enterprise asset test standards for business loans. Second, the accounts of suppliers, these suppliers will be to plant two or three months of the account period, many suppliers are now required cash settlement in order to avoid risks.

    Widely concerned about the recent Hong Kong-listed Smart Union Group factory in Dongguan Zhangmutou the closure of two toy chain is broken because of funding. Smart Union is the world’s largest toy factory on behalf of one of the world’s largest toy brands Mattel, Hasbro and so are its customers.

    According to report, in the closure of Smart Union announced the day before its share price fell 0.08 Hong Kong dollars, and July 20, 2007 closing price of 2.38 Hong Kong dollars compared to a record high, sharp declines 95%. As the share price at its lowest ebb, and purely market OEM Smart Union toy manufacturers not optimistic about the labor-intensive, it has been unable to borrow money from banks in Hong Kong. At the same time, suppliers to stop the supply of ways to recover the money.

  Hennessy thread factory owner is co-Jun has been a supplier of Smart Union owed his company last year paid for 9 to 12 month total of 1.01 million yuan has not recovered.

    Forcing the funds strand breaks end-Jun. According to suppliers said the Smart Union closed down more than 800 suppliers and processors affected, and this part of the arrears of 2 billion yuan.

    Cumulative risk

    Clearly the financial tsunami is not possible to defeat the toy industry night, behind this is the toy industry in recent years continue to accumulate in the crisis.

    Gu Wu believes that the RMB appreciation in 2005 is pushing the toy industry the first stage of the export cost.

    2006, rising raw material prices, resulting in our country do OEM, not the profits of its own brand factory is running out.

    More troubled times in 2007. U.S. subprime crisis led to Europe and the United States in consumer spending, China’s exports have declined. The Mattel toy safety incidents so that China exports plummeted. “2008, European Union, the United States, Japan, 40 countries or regions have to adopt new safety and environmental protection standards, such as require the use of environmentally friendly material than the average 3 to 4 times as expensive materials, coupled with increased costs of foreign inspection, enterprises under pressure. “Vice President of Guangdong Toy Association, told reporters before Guo Zhuo.

    But the deterioration in the external environment, while China’s export enterprises untimely policy tightening.

    Guo Zhuo was this that: “In such complex cases, is the largest toy companies hope to survive. From the large number of enterprises closed down in 2006, this year the worst.”

    How to save Toy Industry

    Now the Government, the industry level have been aware of the seriousness of the problem toys export and began multi-salvation.

    October 21, the Ministry of Finance, State Administration of Taxation announced from November 1, 2008 to increase the 3486 products from the export tax rebate rate. This is our country since 2004 to adjust export rebate policy involving tariff up, one with the largest. One toy export tax rebate rate to 14%.

    In order to solve the problem of financing SMEs. Dongguan Municipal Government, the Hong Kong Special Administrative Region Government announced the Helping policy.

    This trade proposal, in addition to increase the tax rebate, the more some of the funds should encourage enterprises to make their own brands, product innovation, improve product quality, etc.. In fact, China’s toy industry has experienced the crisis is now deep-seated reasons is that China’s toy industry have long remained at low levels on behalf of the processing stage, mostly to OEM mode, relying on foreign countries to provide technology and design, so the more restrained foreign markets .

    Little information:

    From the Customs data: 1 July, China’s toy exports grow more than 2.1% over the same period in 2007, an increase of 22.7% down. Have the toy export enterprises 3507, a decrease compared with 2007, 52.7% over the same period. Exports less than 10 million small businesses account for toy export enterprises to reduce net reductions of 93.1%.