The new European directive on toy safety came into force on July 20, and it has caused concern for many Yiwu toy manufacturers over rising costs and shrinking profits. The European Union's Council Directive 2009/48/EC on the safety of toys limit the use of 19 types of heavy metals, while only eight types were restricted by the previous regulations.

Seen by many toy makers as the toughest regulation so far, the new regulation also forbids the use of 55 allergenic fragrances and limits the use of 11 others for the first time.

As the biggest toy exporter, China's export value takes up 70 percent of the global trade, while Yiwu market is the largest domestic toy export base, and there are over 2000 toy enterprises in Yiwu. Many Yiwu manufacturers believe that the implementation of the new directive will push up their costs and squeeze their profit margins.

Yiwu Toy Industry Enters High Value-added Period