We all have heard reports about the dramatic situation of Chinese exporters and how all their workers are being laid off and massively return to their home town, thousands of kilometers away.
These reports mostly come from foreign correspondant or journalist, mainly reporting from large cities or from Hong Kong. Most of the reports focus on the Guandgond area (Pearl River Area).
Malcolm Moore, the Telegraph’s (UK) correspondent in Shanghai, has just completed a field tour in the Yangzi river delta area (Shanghai, Jiangsu, Zhejiang) to figure out what the real situation is. You can find his articles here. He confirms that exporters are badly hit. At the same time, he also confirms that different sectors are hit differently, with the toy and shoe industries being the most hit of all.
He was also interviewed by Danwei.org, and you can read his interview here.
At the beginning of the interview, he says: “I think the situation is a lot more complicated than the picture that has emerged either in the Chinese or foreign media. On the export side, some areas, such as shoes and toys, have clearly been hit hard. Others, especially the low-cost goods which China is famous for, appear to be flourishing as people tighten their belts and look for value.”
This is a trend that we have seen across the country as well. The suppliers we have seen recently do have a lower level of activity as one year ago. But, as industrial equipment suppliers or high tech suppliers, they are not hit to the point where their survival is in question. Most of the really hit companies are concentrated in a few regions and in the low end shoe and toy industry. Their problems had started earlier (quotas, quality issues, reduced support from the government) and this economic downturn has only compounded their existing problems.
The Telegraph’s articles and the Danwei interview are really worth reading.