100,000 Chinese Factories Closing: Orders Off; Regulations Up
by John Laumer, Philadelphia on 11. 4.08
Hard to lay out what has happened more succinctly than these numbers from China do:
Government statistics show that 67,000 factories of various sizes were shuttered in China in the first half of the year, said Cao Jianhai, an industrial economics researcher at the Chinese Academy of Social Sciences. By year’s end, he said, more than 100,000 plants will have closed...Even before the global financial crisis, factory owners in China were straining under soaring labor and raw-material costs, an appreciating Chinese currency and tougher legal, tax and environmental requirements.Via:LA Times, Some owners deserting factories in China
Unpaid workers are out on the street. Vendors and customers are left without reimbursement or product. Although US factory workers were helped by government safety nets, impacts are similar for Chinese workers and the many US workers out of jobs when factories closed and production moved to China.
Overlooking the immediate pain to those left without wages or payment, there are consequences to the "good" side of the ledger: partial respite from China's greenhouse gas emissions; reduced demand for electrical capacity additions in China (which would almost certainly be satisfied by the worst kind of coal-fired generating stations); and, a chance to rationalize processes and operating procedures that favor sustainable development.
Here's hoping that melamine producers are among the ones to close.
Image credit:USDA, Closed Abbeville Alabama textile factory
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Contrary to your photo accompanying this post, it's important to note that most of the "factories" that are closing are extremely small, old, obsolete facilities - many are just a shed with a dirt floor. These, in turn, are being replaced by larger, more modern factories - places that are safer to work in, and more environmentally-friendly in general.
China's production is still expected to grow 9% this year - they consider it a recession, but there's still going to be a lot of new manufacturing, and millions of new jobs there.
This factoid is useless without corresponding information on the number of factories opening, and the employee loss/gain from both.
The nice people of America have woke up just like the nice people of Germany, South Korea and soon Japan.