Laid-off Factory Workers in China Say Prospects Grim

Oct. 20, 2008
Instability in China's coastal manufacturing hubs as factories face financial difficulties that could possibly lead to large-scale layoffs

Frustrated Chinese workers left jobless when a major toy maker went bust said Oct. 19 they might have to go home in debt, as more factories face failure due to the global financial crisis. More than 100 employees of Hong Kong-listed toy manufacturer Smart Union again crowded outside its factory in the southern export hub of Dongguan on Oct. 19, two days after the firm announced it had gone into liquidation.

The situation has highlighted the growing risk of instability in China's coastal manufacturing hubs as factories face financial difficulties that could possibly lead to large-scale layoffs.

Laid-off migrant workers said job prospects elsewhere in southern China looked grim as soaring prices for raw materials and shrinking demand from the crisis-hit U.S. and European economies squeeze manufacturers in the region.

"We thought about going to Shenzhen or even Shanghai. But then factories are also closing down in those places," Song Xiaoguan, 25, said.

The workers were among the 7,000 people who were left jobless after the company, a major supplier of toys to Mattel and Disney, announced it had gone into liquidation on Oct. 17.

Local authorities have promised to pay the workers unpaid salaries amounting to 24 million yuan ($US 3.52 million) by Oct. 21, Hong Kong newspapers reported on Oct. 19.

Elsewhere, another 1,500 workers lost their job after BEP, a Hong Kong-listed electrical appliance manufacturer, closed down its production line in Shenzhen on Oct. 18. A statement issued by the company said the global financial turmoil had made it difficult to obtain funding from banks and other sources.

Chinese state media reported last week that more than half of the nation's toy exporters had gone broke in 2008, hit by rising production costs, the stronger yuan and tightened safety standards.

Copyright Agence France-Presse, 2008

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