The first seven months of this year saw radical changes in the Chinese toy exporting business. The number of companies that had actual overseas sales plunged 52 percent to 3,507, according to one of the latest reports from the China Customs.

Most of the companies that have left the market were small enterprises with annual sales less than US$100,000. Stats show that 3,631 of such firms have closed their export business.

I actually believe it's a wonderful thing that small firms no longer dominate China's toy exporting business. The ones that have remained in the market usually have better margins, cash flow and are more adaptable to market changes.

I suppose the bigger companies also have better quality control, technologies and brand value. This year, more than 40 countries and regions have released new standards on imported toys, challenging the lower-end of the Chinese toy making industry.

The massive closedown of small exporters also has lead to the dominance of foreign investment and state ownership in the industry, a phenomenon rarely seen in China's manufacturing sectors. Domestic private ownership usually takes a more important role than state ownership, such as in the plastics processing industry, which overlaps the toy industry.