Rising costs, product safety concerns and slowing global growth are likely to make it a difficult year for China and Hong Kong toymakers, the South China Morning Post reported. However, industry leaders said they still expected to see modest export growth. Yeung Chi-kong, executive vice president of the Toy Manufacturers’ Association of Hong Kong, said shipments would increase by about 3%. This was the same growth rate as was seen in 2007, when US$20.5 billion worth of goods were exported. But Hong Kong’s 4,000 toymakers, which operate factories based in the mainland, face a hike in costs of around 15% due to rising prices for fuel, labor and raw materials as well as the strengthening renminbi. Furthermore, the new labor contract law and rising corporate income tax rates could see "hundreds of small players" go out of business, according to Lawrence Chan, chairman of the Hong Kong Toy Council.