Industry Outlook

China’s Economy Grows: What Does It Mean for the Toy Industry?

As of this past August, China surpassed Japan as the world’s second largest economy; second only to the United States. China’s economy has grown 90 times over since declaring a free market economy back in 1978. This is growth the United States has not seen since the industrial revolution. Last year, China surpassed the United States as the largest market for automobiles. It is no secret that China is a growing powerhouse. As the average Chinese income increases yearly, the big question for us in the toy industry is: what does this mean for U.S. toy market?

Currently in southern China there are five factory jobs available to each person. This labor shortage doesn’t just effect the lower paying factories but the higher waged workers as well. Workers have begun job-hopping from factory to factory causing factory owners to constantly train new workers. Traditionally price sensitive industries, such as the toy industry, are amongst the hardest hit when circumstances like this occur. Affordable labor is what made China so appetizing to our industry to begin with. Those margins are being stripped away every day. And now, with so many testing restrictions squeezing the factories, more and more rumors abound that Chinese-owned toy companies are looking inward rather than outward for future sales. With less of a need for U.S. partners, what’s the fate of our industry? We welcome your comments.

Design Edge is a New York-based graphic design and research development studio with office in Hong Kong. Matt Nuccio can be reached at (516) 377–0500 or at

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