BEIJING, October 17 – A Chinese toy maker that exported to big US brands such as Mattel and Disney has shut down due to the financial crisis, leaving more than 6,000 people without work, state press reported on Friday.
Smart Union closed its factory doors in the southern Chinese export hub of Dongguan this week, leaving its workers stranded outside the plants, the China Daily reported.
"The main reason for the closure is we are too dependent on the US market, which has become sluggish," said Xu Xiaofang, a Smart Union human resource worker, according to the China Daily.
Rising labor costs, expensive raw material prices and the appreciation of the Chinese currency, the yuan, had also contributed to the problems, Xu said.
Smart Union announced to the Hong Kong stock exchange, where it is listed, a loss of 201 million Hong Kong dollars (25.9 million US dollars) in the first half of the year.
It was unclear if the factory had halted production temporarily, or if it would be closed for good.
Smart Union had sold many of its products to US toy giants Mattel and Disney, according to the China Daily.
"After losing money for the first half of the year, its cash flow finally dried up," the paper said.
"The workers… have become the latest victims of the worldwide financial tsunami."
Chinese state press had already reported this week that more than half of the nation\’s toy exporters had gone bust in 2008, hit by rising production costs, the stronger yuan and tightened safety standards for their products.
A total of 3,631 enterprises that made toys for export, or 52.7 percent of all such companies, had gone out of business in the first seven months of the year, Xinhua news agency reported.
The businesses were mainly smaller producers with an export value of less than 100,000 dollars, it said, citing a report by the General Administration of Customs.
China is the world\’s largest toy producer and exporter, sending about 17 billion of them to overseas markets in 2007, according to Chinese customs data.