HONG KONG, September 7, 2009 – In spite of stricter product standards implemented in the U.S. and the EU, most surveyed China suppliers plan to continue strengthening exports to these markets, according to Global Sources' (NASDAQ: GSOL) China Sourcing Report: Toys & Games (http://www.chinasourcingreports.com/toysgames).

"Even amid the major economic slowdown in the U.S. and EU markets, these remain the top export markets for China's toy and game manufacturers," said report publisher, Spenser Au.

"However, new product legislation is forcing suppliers to conduct a greater amount of testing and to use more expensive raw materials. Despite the higher costs of compliance, most manufacturers said they are keeping prices stable to boost demand and gain market share."

Among toy and game manufacturers' biggest challenges for the next 12 months:

• 47 percent cited stricter overseas compliance standards;
• 19 percent said price competition; and
• 19 percent cited the cost of raw materials.

Fifty-one percent of manufacturers interviewed for the report said the E.U. is expected to be their main market in the next 12 months, while 29 percent plan to boost shipments to the U.S.

At the same time, many suppliers are fast-tracking efforts to strengthen their foothold in emerging markets such as Africa, the Middle East, Eastern Europe, and South and Central America.

China toy and game manufacturers optimistic about future, investing in R&D

Au said: "Since last year, nearly half of China's toy manufacturers have shut down. Surviving manufacturers, particularly on the low-end, are finding their margins have all but disappeared. This has led a significant number of suppliers to invest more in R&D to create differentiated products that can generate higher margins."

Among suppliers surveyed, 81 percent said they are increasing investment in R&D and other capital expenditures, with about one-third increasing spending by more than 20 percent.

"Suppliers are upgrading product lines with the expectation that the market may recover in the next 12 months," Au said. "More than half of respondents predicted exports to grow in the year ahead.

"Based on the surveys, buyers sourcing from the region can expect to find a larger number of higher-end products available at prices that today's more frugal consumers are willing to pay."

In-Factory interviews, price forecasts and new toy & game models

The 98-page China Sourcing Report: Toys & Games provides detailed profiles of 21 suppliers with verified manufacturing and export credentials and contact details of an additional 16 exporters. It includes a Product Gallery featuring 96 of the most popular export models, with key specifications and full-color pictures.

The Report's surveys, price trends and supply forecasts aim to help buyers make better-informed purchasing decisions.

Specialized Global Sources websites, trade shows, magazines and research reports

China Sourcing Reports are part of Global Sources' sourcing and product information services. These include Global Sources Online (http://www.globalsources.com), China Sourcing Fairs (http://www.chinasourcingfair.com) and Global Sources trade magazines (http://www.globalsources.com/SITE/MAGAZINES.HTM). For more information, visit http://www.corporate.globalsources.com .

The China Sourcing Report: Toys & Games is available for purchase at http://www.chinasourcingreports.com/toysgames .

Free information about China toy and game suppliers and products can be found at http://www.chinasuppliers.globalsources.com/china-suppliers/Toys.htm .