Almost 300,000 Migrant Workers from Hubei Province Out of Work in Two Months
A wave of bankruptcy has started in the Pearl River Delta since two large toy manufacturers in Zhangmutou district of Dongguan City, Guangdong Province closed suddenly on October 15. Mr. Feng, who is in the Nokia cell phone business, told Radio Free Asia (RFA) that approximately one million workers have lost their jobs since October.
More migrant workers had to stop work and return home earlier than usual this year. Crowds of people carrying their baggage can be seen everywhere in the waiting rooms and the outside square of the Guangzhou Railway Station.Layuan Zhou, Assistant Inspector of the Hubei Provincial Labor and Social Security Office, revealed that the numbers of new workers coming into the labor force, compared to the number leaving the work force in Hubei, was in balance before September. However, this balance has been broken since September with more labor returning home. It is estimated that nearly 300,000 workers have returned home, out of work, in the past 2 months.
A woman from Hunan Province, who works in a clothing manufacturer in Panyu City, said, “We haven’t had any work to do for the past three months. We just returned to normal operation this month after the company received enough orders. Our basic wages are very minimal. It’s very difficult for us to survive without overtime pay, so many workers had to resign voluntarily. They couldn’t find other work and had to return home early.”
A woman working as a clerk in a circuit board manufacturing company in Kaiping City told the RFA reporter that the company supplies the world’s leading electronic companies. Since the global economic crisis, orders have dropped significantly, and the company has asked employees to take unpaid vacations for 3 to 6 months, in order to cut costs.
Guangdong’s Huge $US 337 billion Stimulus Package
As Guangdong is one of the leading provinces in China, Guangdong’s economic crisis indicates a larger problem in China. Due to the continued appreciation of the Yuan, the Chinese currency, rising raw materials prices and a series of new policies, including a new labor contract law, companies in the Pearl River Delta region have been facing more and more difficulties.
Governor Huang announced recently that Guangdong will invest $US 337 billion in a total of 222 infrastructure projects in the next 5 years in an effort to trigger more investment.In addition, the rapid spread of bankruptcy has so alarmed Beijing that Weimin Yin, the Director of the Beijing Human Resources and Social Security Department, was sent to visit Guangdong recently to investigate the latest situation.
Impact of Recession Expected to Expand
Xingdou Hu, an economics professor at the Beijing Institute of Technology, told RFA that the Chinese economy is likely to face more difficulties in the future. Many more small and medium size factories can be expected to close due to the monopoly of state-owned enterprises, very heavy taxation, and a variety of additional extra charges.
Yuanzheng Cao, Chief Economist of the Bank of China International Holdings Ltd., believes that the most difficult time has not yet come. The next year will be the worst with regard to the impact of the global economic crisis on China’s economy.