The strictest toy safety regulations in history came into effect in the European Union on Wednesday. All toys imported into the region are now subject to much stricter safety standards. For Chinese manufacturers, the EU's largest supplier, this could pose a major challenge.

Now all toys marketed in the EU must meet higher requirements in mechanical, chemical and physical regulations. And the numbers of heavy metals that cannot to be used in the toys has increase from 8 to 19. Additionally, 66 types of fragrances have been put on the forbidden list for the first time. The new regulations also demand more safety tests in the production process, and toys unable to meet the new safety standards will not make it to market. Our reporter Xia Qiu takes a closer look at what the new safety regulations mean for Chinese manufacturers.

Ample labor and competitive prices made China the leading toy manufacturer in the world. But now, as costs for labor and materials rise, toy makers are facing extra costs because of the new European rule.

Yuan Huixin, Toy Company Manager, said, "The testing fees rise sharply and take up about 1-2-percent of the cost. The costs for the material of the toys increased between 5-percent to 10-percent."

Zhang Li, Toy Company Manager, said, "For our company, orders decreased 30-percent. Maybe, it's because the new regulations in Europe became a barrier to entry for some lower level products. These EU orders have been canceled. As a result, we have to increase the price of our products."

The new Safety Directive was published June 30th 2009, giving consumers assurance that toys sold in the EU fulfill the highest safety requirements, especially those relating to the use of chemical substances.

Most of the toy companies in Nanjing have been well-prepared and are confident of passing the higher standards.

"We began to prepare for the change early last year. We did a lot of work to transform our manufacturing procedures. It was not easy. We were seeking ways to improve the product structure, to purchase new materials and save labor costs. As of now the new standard has not been an issue for us." Said Zhang Li.

Zhai Shanxi, Deputy Director of Nanjing Municipal Bureau of Commerce, said, "The impact of new rules to toy exporters in Nanjing is not very serious. Most of our enterprises have gone through the process of adjustment and already comply with the new regulations."

Companies that manufacture their own line of toys, or those that have a high--profit margins will be the least affected by the new directive.

However, experts warn small businesses may find it tougher in an already competitive market, especially for some original equipment manufacturers, who only produce goods for international clients.

The new regulations will increase the cost of exports to Europe by six to eight percent. That small change can turn a profitable company into an unprofitable one.

The new directive is a test for the Chinese toy industry. It may force some toy makers to abandon the European market. But on the other hand, it urges toy makers to pay close attention to product safety, improve their technology and strengthen global competitiveness. From this prospective, the challenge could be an opportunity for the healthy development of the industry.

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