With production suspended, employees who choose to remain at Golden World Innovation Aluminum have been told they will receive only 80 percent of the minimum monthly salary of 1,900 yuan (US$266) allowed under Foshan labor laws, which is a third or less. of their regular income, until the beginning of April.
“We can’t find the owner,” said a 50-year-old migrant worker surnamed Tong from neighboring Guangxi province, who has worked at the factory for nearly 10 years but has not been paid since September.
Golden World Innovation Aluminum did not respond to requests for comment.
Since 2008, Chinese provinces and cities have set up systems to monitor job changes within companies, releasing public statements every three months. But there are no statistics available to measure the total extent of production suspensions or extended unpaid leave, other than company statements or media reports.
A labor market report released by the Foshan government at the beginning of November said demand from the city’s manufacturing sectors rose in the third quarter compared with last year, but still lagged behind the services sector for two straight quarters.
“This indicates significant pressures in the operation of manufacturing industries due to economic headwinds at home and abroad,” the local government said in the report.
The private sector has long been the backbone of China’s economic growth and job creation, but it has yet to fully recover, with its investment in fixed assets contracting 0.5 percent in the first 11 months of the year, in contrast to China’s rising GDP. 6.5% for the government sector.
During the real estate sector’s peak, Golden World Innovation Aluminum enjoyed strong orders, according to Tong, as the domestic market was sufficient to offset external shocks, including tariffs imposed by the United States since 2017.
He added that skilled workers in their 40s can still earn more than 7,000 yuan a month for working about 60 hours a week.
But now, amid falling orders, the producer, which has the capacity to produce about 400 tons per month, is struggling to break even.
“When real estate was the most profitable industry in China, aluminum goods were needed everywhere and were exported to all parts of the world,” Tong said.
But the real estate crisis seemed overwhelming this year. Fewer and fewer workers are needed.
Will the unemployment numbers among young people in China remain the same after the sudden stop in the data?
Will the unemployment numbers among young people in China remain the same after the sudden stop in the data?
The slump in the real estate market has worsened, despite Beijing’s move to ease restrictions, representing a major drag on the economy across a wide range of sectors.
In the central province of Henan, Yaxin Iron and Steel Group in Tangjin County also announced the suspension of production starting last month until after the Lunar New Year holiday in mid-February, according to an employee who requested anonymity due to the sensitivity of the issue.
Yaxin Iron and Steel Group did not respond to requests for comment after China Industrial Securities Futures, an industrial analysis firm, reported the comment.
Raymond Zheng, the owner of a small building foundation company in Guangdong province, has already put most of his employees on unpaid leave since June.
“The financing chain is broken, and many companies, both upstream and downstream, are facing solvency problems,” said Cheng, who also warned that a lack of funds would hurt the quality of construction projects.
China’s development is the biggest political priority at the major economic meeting
China’s development is the biggest political priority at the major economic meeting
The meeting said that insufficient demand is one of the main risks hindering economic growth, and that overseas markets have become increasingly complex and uncertain, but favorable conditions still outweigh unfavorable factors in development, urging confidence.
Peng Ping, CEO of the Guangdong Reform Association, a Guangzhou-based think tank, said many SMEs may not be able to survive this winter despite some signs of an export recovery.
He said: “The authorities must pay attention to the seriousness of the economic situation.” “There is an urgent need to increase supportive policies.”
The slowdown was also seen in other sectors, including electronics and plastics producers, as well as the printing industry.
Local media reported earlier this year that plastics manufacturers Shenli and Forward, as well as Good Printing, also closed their factories in Shenzhen, cutting thousands of jobs.
Promotion manager Yang Lu experienced the problem firsthand at the beginning of December after he tried to visit three shoe companies in Dongguan, but discovered that they had all halted production.
The closures are also affecting nearby stores, restaurants and hotels that depend on the workers for their income.
“It seems that many communities have become quiet in the city,” Liang said.
The problem, Paris-based investment bank Natixis said at the end of November, is that China has yet to find any emerging industries strong enough to replace real estate as a pillar of the national economy.
The government should guard against the risks of further deterioration in investment conditions and financing difficulties for private companies in 2024, according to a report by the Guangzhou Greater Bay Area Institute.
How much employment pressure does China face?
How much employment pressure does China face?
“If confidence is not revived, private sector entrepreneurs are likely to continue to be unstable,” said the report prepared by the think tank led by prominent political economist and government adviser Cheng Yongnian.
The report, released at the end of November, said that prolonged weakness in private investment would lead to a contraction in demand, which could dampen hopes for a strong economic recovery.
Xu Zhiyuan, deputy director of the Institute of World Economy and Politics at the Chinese Academy of Social Sciences, said in an article published in October that the urban unemployment rate surveyed is likely to underestimate current job pressures, with more metrics needed to better reflect it. Economic situation. Real situation.
“China still has enough policy space to develop the economy and achieve high-quality growth,” Xu said.