China experienced a major slowdown in growth of its toy exports in the first quarter of this year, partly because of expediated appreciation of its currency and mounting production cost.

Between January and March, China exported $1.5 billion worth of toys, a growth of 3.3 percent on the same period of last year, sources with the General Administration of Customs said on Thursday.

The growth rate was 20.6 percentage points lower than the year-earlier level, the sources added.

Growing quality concern was another factor behind the slowdown.

Quality issues gave China's toy industry some tough times during the second half of 2007. Western countries raised quality standards and issued several recalls on Chinese toys.

One company affected was giant Mattel, which recalled more than 18 million toys last August, which were later traced to its design flaws.

China conducted special campaigns to improve toy quality and banned many unqualified companies from exporting.

The first three months of this year saw the United States, European Union and Hong Kong Special Administrative Region buy $1.09 billion worth of toys, or 72.5 percent of the Chinese mainland's total.

In breakdown, the Chinese mainland sold $590 million worth of toys to the United States, down 5.8 percent, $380 million worth to the European Union, up 14.8 percent, and $110 million worth to Hong Kong Special Administrative Region, down 26.8 percent.

Foreign-funded companies exported $720 million worth of toys, up 7.7 percent, and State-owned enterprises exported $460 million worth, up 3.7 percent.