SHENZHEN - Most of the toy businesses in southern China's export-oriented city of Shenzhen have seen 20-30-percent drops in overseas orders this year due to the economic downturns in Europe and the United States, a local industry group official said Tuesday.

"Some businesses' orders have even plunged by a half," said Liu Yanfang, secretary-general of the Shenzhen Toy Industry Association.

With Christmas approaching, this should be a boom season, but many toy businesses in Shenzhen have given holidays to their employees ahead of schedule because of the sharp decline in orders, Liu said.

"The Christmas order period was already over, and the situation for the whole toy industry is far from ideal," said Gu Wu, general manager of the Shenzhen Huakun Industrial Development Co Ltd.

"Actually, the bleak signs had shown up as early as May," he said.

China exported $2.1 billion worth of toys last year, and sales in Shenzhen alone accounted for almost a fifth of this total.

"The economic downturn and the upgrading of toy safety standards in Europe and the United States, as well as the sharp rise in costs of labor and raw materials, have all led to the shrinking toy market in Shenzhen," Liu said.

"Lots of Taiwan- or Hong Kong-funded toy businesses in the city have been forced to shut down over the past two years as they had long lived as OEM [original equipment manufacturer] factories and had no R&D and marketing capabilities," she said.

She said toy businesses should foster their core competitive edges and the government should promulgate supportive policies, or toy businesses will face "more severe" challenges in the future.