The toy-making hubs of Hong Kong and South China saw their exports fall about 10 percent in 2009, on slow worldwide demand. But local industry leaders interviewed at the Hong Kong Toys & Games Fair said there are some tentative signs of an upturn.
Government figures from both Hong Kong and China's toy-making hub in the Guangdong province showed that toy exports in both regions declined between 10 percent and 11 percent through the first 11 months of 2009.
Since China and Hong Kong together account for 70 percent of world toy production, the figures could be read as indicating sluggish conditions in the market.
Wong Tit Shing, chairman of the Toys Advisory Committee of the Hong Kong Trade Development Council, however, said at a news conference at the toy fair that there have been some positive signs in recent months.
Wong, who also is managing director of Hong Kong plastic and electronic toy maker Jetta Co. Ltd., said Christmas orders were better than expected in North America and Europe, with some last-minute rush orders for the holidays.
He also said the Hong Kong trade council's export index, which measures conditions and attitudes among local firms, returned to positive figures in late 2009, the first time in nearly two years it has climbed from negative territory.
We feel the worst is over, Wong said.
But the head of another Hong Kong toy industry group was more cautious.
Bernard Ting, chairman of the Hong Kong Toys Council, which is part of the Federation of Hong Kong Industries, agreed that the industry is seeing signs of a recovery as retailers restock inventory.
But he believes that without a strong pickup in the world economy, Hong Kong's toy industry, which includes thousands of Hong Kong-owned factories in mainland China, could see things slow down later in the year.
The first half of the year may be somewhat busy, but the second half, because the inventory is back to normal, it may slow down a bit, Ting said in an interview at the fair. He also is general manager of Qualidux Industries Co. Ltd., a Hong Kong-based plastic toy maker.
Ting predicted that 2010 exports for Hong Kong's toy industry, which is the second largest in the world after mainland China's, would show somewhere between zero and 5 percent growth.
The head of another Hong Kong business group, the Toy Manufacturers' Association of Hong Kong, was more optimistic, suggesting that local toy manufacturers could grow 5-10 percent in 2010.
That group's president, David Chu, said Christmas holiday orders were decent. He said customers were much more active in discussing future orders at this year's Hong Kong fair, the world's second-largest toy fair and the largest in Asia, compared with conditions a year ago.
I believe they are still cautious but it is not like last year when they were miserable, said Chu, who also is an executive at Tai Nam Industrial Co. Ltd.
Some smaller export-oriented Chinese toy makers echoed similar themes, projecting that 2010 will be better than 2009, but with most also saying that business still remains well below the peaks seen before the economic crisis.
Jack Huang, sales supervisor at rotational and injection molder Shenzhen Hungfung Bros. Plastics Products Co. Ltd., said earlier this year business in its major markets in Europe and North America was down between 30 and 60 percent at its worst, and remains off by 20 percent.
But he said the company has responded by targeting the domestic Chinese market, and has hired its own design staff to try to develop new products, rather than making products to customers' designs.
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