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Tuesday, 21 October 2008

Factory shuts, 1,500 jobless

BEIJING - A HONG KONG-LISTED appliance maker shut its southern China factory on Monday, state media reported, making it the latest victim of the world economic slowdown's impact on Chinese manufacturing.

The closure of Bailingda Industrial Co.'s electrical appliance factory in the export hub of Shenzhen has left 1,500 employees jobless, Xinhua news agency reported.

It follows the failure on Friday of another Hong Kong-listed firm, toymaker Smart Union, which shut its factory in the nearby city of Dongguan in Guangdong province, throwing about 7,000 out of work.

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

Xinhua said more than 1,000 of the laid-off Bailingda employees had gathered outside the factory on Sunday, demanding government intervention to secure unpaid wages.

The report made no mention of any disturbances.

It said worried Guangdong labour authorities were considering setting up a fund to help workers laid off by factory closures.

Smart Union owes its workers at least six weeks' wages each, Hong Kong's South China Morning Post newspaper has reported, citing a company employee.

The Smart Union workers crowded around the factory's gates last week seeking news of their jobs and unpaid salaries, prompting the local government to warn them against escalating their action.

Experts have warned of increasing pain in China's coastal manufacturing regions due to the world economic crisis, particularly in the main export markets of the United States and Europe.

Rising labour and raw materials costs and the appreciation of China's yuan currency, which makes Chinese-made goods more expensive overseas, are also seen as factors.

Chinese state press reported last week that more than half of the nation's toy exporters - about 3,631 enterprises - had gone belly up in 2008.

China's economy is heavily dependent on overseas demand for its cheap manufactured goods. The factories that make them provide work for tens of millions of poor Chinese. -- AFP

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