CHINA's COUNTERFEIT TONER CAPITOL TO LOOSE 2.7Mil JOBS

[Anonymous]

http://timesofindia.indiatimes.com/World/China/Southern_China_to_shed_millions_of_jobs_as_economic_crisis_bites/articleshow/3636000.cms
CHINA’S COUNTERFEIT CAPITOL TO LOOSE 2.7Mil JOBS
Southern China to shed millions of jobs as economic crisis bites
DONGGUAN:
At least 2.7 million factory workers in southern China could lose their
jobs as the global economic crisis hits demand for electronics, toys
and clothes, according to industry estimates.The region has seen
massive export-driven expansion in recent years by supplying the world
with cheap consumer goods, but rising production costs and falling US
and European demand have marked a swift end to the boom.Now 9,000 of
the 45,000 factories in the cities of Guangzhou, Dongguan, and Shenzhen
are expected to close before the Chinese New Year in late January, the
Dongguan City Association of Enterprises with Foreign Investment
estimates.By then, the association expects overseas demand for products
from the three manufacturing hubs to have shrunk by 30%, as the
knock-on effects of the US housing market collapse and credit crunch
filter down to Chinese workers.

“I am afraid it is not going to
look good on the Chinese government if the decline of the export-led
industries and the unemployment problem continue to worsen,” Eddie
Leung, the association’s president said.Leung, also a member of the
Chinese Manufacturers’ Association, said the estimate of 2.7m job
losses was conservative, given that many of the larger factories in
Guangdong province employ thousands of workers.One of them, Hong
Kong-listed Smart Union, a major toy manufacturer in Dongguan supplying
US giants Mattel and Disney, closed its doors last week, leaving 7,000
workers out of work and with several weeks of back pay owed.

Clement
Chan, chairman of the Federation of Hong Kong Industries, said a
quarter of the 70,000 Hong Kong-owned companies in southern China,
17,500 businesses, could go to the wall by the end of
January.Describing the likelihood as a “worst case scenario,” he said
Hong Kong firms in the region employed a total of 10 million workers,
but did not want to speculate on the extent of possible job
losses.While small and medium-sized factories are especially prone, the
threat of lay offs looms just as large over the region’s manufacturing
giants, further squeezed by the appreciation of the yuan.

Harry
To’s Mansfield Manufacturing is a classic example of the spectacular
growth in China’s industrial heartland over the last three decades.To
started a metal business from a small room in Hong Kong in 1975, in
1991, he joined hundreds of other Hong Kong entrepreneurs moving their
production across the border into China to take advantage of cheap
labour and land.He now employs 8,500 workers in 11 factories in China
and Europe. His six factories in Dongguan cover 140,000 square meters
(1.5 million square feet).To’s company, which is now a subsidiary of
Singapore-listed InnoTek Ltd. supplies metal components for cars,
plasma televisions, printers and other electrical appliances to
Japanese brands including Canon, Toshiba, Epson, Minolta and Fuji-Xerox.

Business
for the company, among the largest in its field in China, has grown by
40 percent annually in recent years, but with credit being harder to
come by, no manufacturer is safe, he said.”With banks being so tight on
their lending policies now, bringing down a factory overnight has now
become very easy.”All his expansion plans have had to be put on
hold.”Some of our long-time Japanese and European clients have asked us
to stop producing for them in the next two to three weeks,” he
said.”They said they did not want to have too much stock piled up in
their warehouse as demand continues to dwindle.”

To recently
started building a new 70,000 square metre factory in Dongguan and was
planning to hire 2,000 more workers later this year. But now, all work
on the unfinished factory has stopped until more orders roll in.”No one
would expand their business when the prospects for the entire
manufacturing industry look so grim,” he said.Instead of hiring more
workers, To is looking at cutting 1,000 employees across his
operations.But far from being downhearted, he is shifting part of the
company’s export-led production to developing energy-saving electrical
appliances for the domestic market, which he sees as weathering the
current financial turmoil.”In the long run, I am confident that
mainland Chinese consumers’ purchasing power will keep rising as their
Western counterparts continue to lose out.”

[Author]

October 27, 2008 at 10:09 AM