Wooden toys------the main strength for the development of the society and economy of Yunhe, Zhejiang,is Yunhe’s traditional industry, advantage industry and support industry. In 1994，Yunhe was awarded “Chinese wooden toy Capital” by national agriculture department, and is honored as “the Chinese wooden toy city” in 2003. Start from 1970s-80s, until now Yunhe wooden toys has more than 30 years development process. Passed through several generation of person's endeavors, Yunhe wooden toys has formed wooden toys colony that characterized by “the small toy big industry, the small product big market, the handicrafts big culture”, has become the backbone force in the global market competition, the characteristic economic phenomena in Yunhe, and forms to a unique wooden toy colony. This article analyzes its competitive advantage (industry advantage, market advantage, environmental advantages) and its problems (lack of advanced mode of production & brand awareness & export ability, OEM export mode, etc) during the process of development through the introduction of Yunhe wooden toys’ history and present, then put up with personal opinion and suggestions to help the Yunhe wooden toy industry come into further fast, healthy, scientific and sustainable development.
KEYWORDS：wooden toys, competitive advantage, industry colony, bottlenecks in development
