100,000 Chinese Factories Closing: Orders Off; Regulations Up

empty closed factory usa photo

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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