Containers of tinsel prove Santa's workshop is in China

When Father Christmas visits homes across Europe this year, there is more than a good chance that most of his sack of cut-price Gameboys, tinsel, crackers and flashing lights will sport the 'Made in China' label.

European Union statistics suggest children's toys account for 20 per cent of the mainland's annual exports to the continent, while the rag trade is the biggest export sector to Europe. There are also 20 billion clothes exported from the mainland to the EU a year alone, without taking into account the copies of high fashion brands such as Dolce & Gabbana.

Just how this economic whirlwind is blowing into Europe from the East this Christmas is best seen in places such as the Poligono Cobo Calleja in Spain. This unglamorous, slate-grey industrial estate, about 25km from Madrid, is the biggest distribution centre for mainland goods in Europe.

Here, about 10,000 Chinese - or one in nine of the entire registered Chinese population in Spain - work around the clock in what appears to be a chaotic rabbit warren of warehouses and makeshift shops.

But as Ming, 43, who did not want to give his full name because of the shady nature of his business, has been working here for seven years soon makes clear, appearances can be deceptive. It is in the Cabo Calleja where the rising Chinese economic dragon crashes into the west and turns into a well-oiled money-making machine.

Mr Ming runs a clothes shop, selling everything from wedding dresses to cheap copies of luxury fashion brands such as Kenzo or Prada. Every week he flies in supplies from his home province, Guangdong, where he deals with factories. They are then sold or shipped to shops around the country.