By Simon Parry and Hazel Parry Dec 20, 2009, 3:04 GMT
Yiwu, China - Don't tell the children, but the real-life Santa's Workshop is nowhere near the North Pole: It's a grim sprawl of factories in eastern China where more than a half of the world's Christmas decorations and novelties are produced.
In the industrial city of Yiwu, 200 kilometres south-west of Shanghai, migrant workers from some of the country's poorest provinces work 13 hours a day, seven days a week for take-home wages of as little as 100 dollars a month - and they don't even get December 25 off.
Hundreds of factories and a huge wholesale market cater to 70 per cent of US demand and 50 per cent of global demand for Christmas novelties ranging from trees and tinsel to dancing Santa figures and inflatable reindeer.
Around 360 million dollars of Christmas goods are exported from Yiwu every year with 10,000 different items shipped overseas, provincial officials said.
But this year, seasonal cheer is in especially short supply in Yiwu. Tens of thousands of workers were laid off as overseas buyers slashed their orders for a cut-price Christmas.
Bleak export statistics as well as statements from factory owners suggested that this Christmas could be its blackest ever.
In September 2008, more than 3,000 shipping containers of Christmas goods left the city each day for markets around the world. In September this year, half as many containers were shipped.
At one small factory on the city's outskirts where workers were being paid by the piece to complete an order of 200,000 plastic snowmen for sale in South Korea, general manager Tan Yulan said: 'Last year, we had 50 workers. This year, we have only 12.
'In 2008, regular customers were placing orders for 100,000 yuan (14,600 dollars) of goods,' Tan said. 'This year, the same customers are only placing orders for 50,000 to 60,000 yuan.'
Staring out across the largely deserted workshops of his four-storey factory, he said: 'For us, 2007 and 2008 were the golden years for Christmas goods. This year is not good at all, and we have had to send a lot of workers home to their villages.'
At another factory, 300 workers were making mechanical dancing Santa Claus figures for export to Germany.
'We are using cheaper materials for the Santa outfits this year so that we can cut the price because customers simply won't pay as much,' owner Ku Kan said.
The tone was more upbeat at Yiwu's biggest plant. It has a workforce of 1,000 at peak production times - and a combination of low labour costs and an order for 30,000 ornamental trees from a major home-improvement chain in Britain saved its Christmas.
It also makes up to 200,000 Christmas tree baubles a day and last year completed an order for 1.3 million pieces of tinsel from a single US chain store.
In the Christmas tree section, about 500 migrant workers at a time piece together ornamental trees in a vast hangar-like workshop, squatting on wooden stools behind weaving machines and gluing replica branches together.
Conditions here as so basic they make Ebenezer Scrooge seem like a model employer. The workers earn 900 yuan (131 dollars) a month with 300 yuan deducted for bed and board.
With its rock-bottom labour costs, the factory is able to sell the Christmas trees to Britain for less than 7 dollars apiece. In Britain, they sell for 10 times as much.
'People are still buying Christmas trees - you can't have Christmas without a tree - but they are definitely buying fewer baubles and tinsel,' sales manager Xu Jing Jing said.
Yiwu's wholesale market reflects the downturn. It is the world's biggest with 62,000 stalls selling 320,000 products and covering 4 million square metres.
One section is dedicated to Christmas goods - and stallholders here said overseas buyers are taking advantage of the recession to drive prices even lower.
Here, a 60-centimetre synthetic Christmas tree sells for 2.3 yuan. A dancing Santa figure that jiggles to Jingle Bells can be bought for 18 yuan complete with batteries.
Wu Yong, 30, a gloomy stallholder selling dancing Santas said: 'Business is terrible. I'm giving this up. Hardly anyone is buying, and anyone who is, is trying to get stuff at half the price they did last year.'
With typical Chinese resourcefulness, however, others are adapting to the changing market. 'Christmas isn't what it used to be, so next year, we're switching to Halloween goods,' factory owner Liu Puhong said. 'That's where the money is.'
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