

Gloomy outlook for China exporters as factory closure wave looms - chailatte
http://www.reuters.com/article/2011/11/08/us-china-exports-hongkong-idUSTRE7A71N420111108?

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RockyMcNuts
To put things in perspective, in the financial crisis, China GDP declined even
more than the US since they're export and manufacturing-based. They did a huge
stimulus, which unlike certain other countries (ahem) was highly effective.
Lots of construction, high-speed rail, etc. Recently the economy has been
overheating and inflation has been running hot, the stimulus was withdrawn and
money was tightened. A lot of stories of companies going bust, entrepreneurs
fleeing loan sharks. (The banks mostly serve state-owned and established
companies, but there is a sketchy shadow financial sector).

It's possible that there will be hard landing, but it's also possible the
authorities will sidestep it, and it's just a shift away from light
manufacturing toward higher value stuff, as that shifts to Philippines,
Bangladesh etc.

China is a huge and complicated and rapidly-evolving place... worth a trip,
had the chance to go for a few weeks earlier this year. The media gives us a
bit of a cartoon version, kind of like they get the Hollywood version of the
US (although since world culture is US-centric they're probably a little less
ignorant of us).

Not to downplay that there are some big economic and environmental and civil
rights issues (we have some too). They're sort of a billion-plus country
version of the startup trying to bake a royal wedding cake in 10 minutes.

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jisaacstone
The conclusion presented in the title is not supported without more data. Bad
news for Hong Kong factory owners, most likely, but how does that reflect on
all of China?

\- 50,000 is what percentage of all factories in China?

\- How many factory closings happened last year? What is the ten year average?

\- How many factories are opening? Perhaps HK factories are closing due to
competition from bootstrapped mainland factories?

\- What is the success rate and average lifespan for a factory in China today?
I imagine it is quite low.

The article presents a compelling data point, but not a full argument. The
Pearl River Delta is far from stable and there are as many carcasses of failed
investments as there are successful ones.

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hop
Visited a dozen bioplastic and stainleed steel fabricating factories in
northern and southern china six monthes ago. The labor rates they pay the
thousands of workers they house and employ had doubled or tripled in the last
1.5 years as competition for them has increased.

It's a pretty small data point, but it's pretty incredible to comprehend that
~half the country is making so much more money. And many times more than their
parents did.

