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Business failure moves garment industries out of Dongguan
01 Jul '08
1 min read
By the end of 2007, Humen Tow of Dongguan City of China was left with only 200 enterprises and since the start of 2008, factory closures and relocations have sped up.
In the first quarter of 2008 alone, a large number of immigrant workers left Humen Town because the number of factory shut downs increased with a pace greater than in 2007. Local towns and villages spent some 20 million yuan as dismissal wages to immigrant workers.
There was a time when a factory would accommodate around thousand people but now they are left with only a dozen. This actually goes to show that industries are moving out from the region which is really concerning because the garment industry in Humen Town, is world renowned and houses more than 1,400 foreign-funded enterprises. So, if these firms shut down or shift their base, it is bound to incur huge losses to the industry and leave thousands or perhaps lakhs of workers unemployed.
Tao Dong, chief economist of Credit Suisse believes that in the next three years, one-third of export-oriented enterprises in Guangdong Province may face the destiny of closure.
In the first quarter of 2008 alone, a large number of immigrant workers left Humen Town because the number of factory shut downs increased with a pace greater than in 2007. Local towns and villages spent some 20 million yuan as dismissal wages to immigrant workers.
There was a time when a factory would accommodate around thousand people but now they are left with only a dozen. This actually goes to show that industries are moving out from the region which is really concerning because the garment industry in Humen Town, is world renowned and houses more than 1,400 foreign-funded enterprises. So, if these firms shut down or shift their base, it is bound to incur huge losses to the industry and leave thousands or perhaps lakhs of workers unemployed.
Tao Dong, chief economist of Credit Suisse believes that in the next three years, one-third of export-oriented enterprises in Guangdong Province may face the destiny of closure.
Fibre2fashion News Desk - China
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