Chinese workers make Christmas toys for UK at 10p an hour

CHRISTMAS came early to the 189 Industrial District in Henggang, just outside China's Shenzhen Special Economic Zone, the island of capitalist enterprise situated in Guangdong Province, which has become the world's biggest toy-maker. It is a reasonable bet that at least one of the toys in every British child's Christmas stocking this year will have been made in Guangdong.

At the Qualidux Industrial Company, toy production for Christmas began in earnest back in July, with 7,000 workers turning out millions of Mates Mighty Morphins, Harley Davidson speaking motorbikes, Barbie Doll accessories, Fisher-Price Dream Houses and all manner of other plastic toys. This Hong Kong-owned factory is among the biggest in southern China. It has been designated as a model factory by the Chinese government and was the first in China to be awarded a ISO 9000 international standards quality certificate.

More typical of the estimated 3,360 toy companies in the region is another Hong Kong-owned enterprise, Kation Ltd, which moved to China three years ago and is far more a seat-of-the- pants operation, employing around 200 people. Wong Chee-sang, a director of the family-owned company, said they used to make watches and clocks but found the process too complex and the profit margins too low.

Like many small companies looking for a break in the market, Kation needed luck and skill. It stumbled into the video games arena and hit gold with Mad Catz, a car-racing video game with an analogue steering-wheel and foot pedals. Kation's American customers have told the factory to ship as many Mad Catz games as they can make. As a result the factory has moved to a seven-day week and is flying out its products to catch last- minute Christmas buyers in American shops.

The rewards for the workers are less spectacular. They are paid 10 renminbi (about 90p) per day for nine hours' work and receive housing, medical services and food. This means employees take home around 280 renminbi (pounds 25) per month.

Over at the Qualidux factory the pay is slightly better - 300 renminbi per month - but the facilities for the staff are far superior. In addition to housing, medical care and food, the factory provides a karaoke room, cinema, library, subsidised store, hairdresser and other recreational facilities which are good by Chinese standards.

However, these facilities are not enough to attract more than a handful of local workers. Guangdong people "don't want to work as labourers", says Chan Pui-sing, the factory's executive manager.

Instead he employs mainly young women from other provinces such as Hunan, Sichuan and further afield. This most southern part of China has become a magnet for workers from other provinces. At Chinese New Year there is a surge of workers in and out of the factories. At Qualidux about half the workforce changes every year. Many workers leave even earlier. "They get homesick," said Mr Chan. "It's the first time they leave home, and they can't cope."

So, who makes the real money out of toys? The question is not easily answered, but one example provides some insight. Qualidux sells its range of White Rangers, a variety of Action Man-type toy, for $1.50 (pounds 1). In American stores these toys retail for about $20, but when they were really hot-selling items they were sold for as much as $100 apiece.

The toys made in these factories are too expensive for Chinese children, who make do with more basic products. However, the trend is for ever more sophisticated toys. Where a company like Qualidux once made toy motorcycles which merely had wheels and could be pushed up and down, it now makes $50 Harley Davidson models with lights that flash and a disembodied voice which says "ride to live, live to ride" at the press of a button.

As for the workers, they will be at their workstations on Christmas Day, which is not a holiday in China. The only reminder of the festive season is a battered-looking cardboard Father Christmas who peers down from the entrance to the Qualidux factory.