Sales of Chinese-made toys will at best be flat next year as the recession in the United States and Europe is likely to continue, according to two major industry bodies. The Toys Manufacturers' Association and the Hong Kong Toys Council, the city's two industry representatives, expected sales to meet their target of 3 per cent this year but that poor demand would keep sales barely changed next year, said Yeung Chi-kong, a senior executive of both organisations. After going through tightened safety standards and higher costs in the past 18 months, the growth-challenged industry sought to ride out the economic doldrums and restore consumer confidence by pursuing an aligned global standard in safety requirements, he said. Hong Kong Toys Council chairman Lawrence Chan Wing-luen is keeping his fingers crossed that 'a spring' would return in the industry following an 18-month 'deep winter'. 'Consolidation of the toy industry started in the summer of last year, then the industry was caught in a deep winter and recently in a deep freeze,' Mr Chan said yesterday. He cited Guangdong customs statistics showing that about half of the 8,000 toy producers have been weeded out in the past couple of years. Hong Kong investors, which account for about one-third of the remaining 4,000 toymakers, widely fell victim to higher costs, fewer orders, product recalls and tightened safety rules in various countries. Mr Chan pointed out that costs of safety tests had surged threefold or fourfold since the rounds of product recalls in July last year. The global financial crisis sparked the demise of toy producers, especially in the production hub of Guangdong. Many of them were dealt another blow last week when the fifth-largest retailer in the United States, KB Toys, filed for bankruptcy protection. The industry bodies were identifying Hong Kong suppliers' exposure to the retailer, Mr Chan said. Although he welcomed recent government measures to help struggling small and medium-sized enterprises, he said there was a big question mark about how many manufacturers would benefit.