Beijing - Christmas is normally a happy time for the
millions of workers at vast factory complexes in China's southern
manufacturing powerhouse of Guangdong province.
The workers can relax in the knowledge that the export orders they
have just completed will bring them relative prosperity, at least for
a few months.
But this year, Christmas will instead be an anxious time for many
Guangdong workers as they seek new jobs before they use up their
dwindling savings.
Jiang, a migrant worker from the south-western province of
Sichuan, recently lost his job at the Hejun toy factory in
Guangdong's Dongguan city.
'I worked at Hejun for three years as a painter,' Jiang told
Deutsche Presse-Agentur dpa by telephone from Dongguan.
Jiang, who declined to reveal his full name, said he had earned up
to 1,600 yuan (234 dollars) per month at the factory.
'My wife is in Sichuan now, and I have two kids aged seven and 13
who are studying in Dongguan, so I cannot move back to Sichuan or to
another city,' he said.
'I don't have money to start my own business, a new job is not
easy to find and I have no idea of the prospects of finding one,'
Jiang said.
There are already tens of thousands of redundant workers like
Jiang in Guangdong and other south-eastern provinces as factories
making toys, shoes, textiles and clothing shut down.
The effects of the global slowdown are likely to become more
pronounced in China over the next year, Liu Kaiming, the director of
the Shenzhen Institute of Contemporary Studies, said by telephone
from Guangdong's biggest manufacturing city.
'Christmas is a good sales season for toys, but the orders from
the EU and the US dropped dramatically this year due to the
recession,' Liu told dpa.
'The main body of China's economy is the export economy and the
main target countries of exports lie in the EU and the US, so you
will see more businesses affected next year,' he said.
The Federation of Hong Kong Industries recently forecast that up
to 2.5 million people could lose their jobs by January in the Pearl
River delta, which includes Hong Kong, Shenzhen and Dongguan.
The government's official Xinhua news agency said in analysis this
week that the economy faced 'daunting challenges,' pointing to 'weak
domestic demand' attributed to an 'inadequate social security
system.'
Rising costs of labour and materials and the gradual appreciation
of China's currency against the dollar have also deterred investment.
Worried about the potential effect on China, President and
Communist Party leader Hu Jintao has already discussed the financial
crisis by telephone with US president-elect Barack Obama and is
expected to meet him in Washington on the sidelines of the G20
economic summit.
This week, the government announced a package of measures designed
to 'offset the adverse external economy by boosting domestic demand.'
It promised to spend an estimated 4 trillion yuan (586 billion
dollars) on infrastructure projects, reduce some taxes and loosen
bank-lending requirements.
Analysts welcomed the announcement but warned that economic growth
was still likely to slow next year.
Morgan Stanley Research in Hong Kong said it had lowered its GDP
growth forecast for China from 8.2 per cent to 7.5 per cent.
'The lower growth forecasts are mainly explained by smaller
contribution of net exports - due to slower export expansion - to
growth and weaker investment in the real estate sector,' Morgan
Stanley said in a report.
Hong Kong-based economist Tao Wang of UBS Investment Research said
in a report to clients that public housing and infrastructure were
'likely to receive the biggest push' from the new package.
'These public projects will help to boost overall investment
sentiment and bring about more bank lending,' Wang said.
The UBS report also said China's GDP growth was likely to slow to
7.5 per cent next year, down from 9 per cent in the third quarter of
this year.
But Zhou Xiaochuan, the governor of China's central bank, last
weekend forecast economic growth of 8 to 9 per cent in China next
year.
State media quoted Zhou as saying at a summit of G20 finance
ministers in Sao Paulo, Brazil, that the Chinese central bank would
'cooperate with the International Monetary Fund to stabilize
financial markets.'
Foreign Ministry spokesman Qin Gang echoed Zhou's comments on
Tuesday and said the government's economic package would help China
to 'promote the stable growth of the domestic and world economies.'
'We will make our biggest contribution to the world by maintaining
the healthy and stable growth of our own economy,' Qin told
reporters.
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