Page last updated at 01:44 GMT, Wednesday, 19 November 2008

Factories shut as crisis hits China

By James Reynolds
BBC News, Guangdong province, southern China

Outside the An Jia baby cot factory in Dongguan, a group of factory workers surrounds a single policeman on a motorbike.

An abandoned furniture factory in Guangdong province, China
Once-thriving workshops are now silent and bare
"Where are the three people you arrested?" they shout at him. "Give them back to us!"

The officer looks uneasy and he decides to retreat.

Right now, factory workers here are angry. The world's financial crisis has begun to hit them.

It is easy to understand why: since the West can't afford to buy as much, China isn't able to sell as much. In better times, the An Jia factory would ship its baby cots to the US. But now its workers say the US has stopped buying. Their wages have been cut by up to 75%.

One man waves two wage slips, typed on small pieces of paper. The slip for May shows that he earned 2,523 yuan ($370; 248) that month. The slip for September shows that his earnings were cut to 445 yuan ($65).

"Our boss wants us to bail him out," shouts Li San Le, one of the workers.

"When things were good, the boss didn't give us a raise, but now that he's in trouble, he wants us to rescue him," adds a woman standing in the crowd.

Jobs dry up

At a nearby job market, groups of men stand around looking gloomy. Mr Lou, a craftsman, needs a new job. This is the first time he has ever had to go out and find one.

"What kind of pay are you looking for?" the job market organiser asks him.

Factory director Sergio Sum
Everyone is quite worried. Not just owners, but workers as well
Sergio Sum
Director, Top Sun Manufacturing

"I know things are tough - but I need a job which pays more than 3,000 yuan."

"You won't get that here," the organiser replies.

Men like Mr Lou have spent their lives working in a country which never seemed to run out of jobs or money. But now things have changed.

This year growth has slowed, and more than 60,000 businesses have closed down. Reports say that more than 50% of toy factories have closed down.

In the corner of one abandoned furniture factory in Dongguan, there is a pile of half-finished table legs. The only person at work is a woman quietly collecting bits of wood to sell as scrap.

Outside the factory, the workers' dormitories are empty. Cheap posters of Chinese pop stars are still stuck to the wall - many of those who used to work here were teenagers who had come in from the countryside to get a better life.

Going home

Next door, a shoe factory is still going. Workers pack up boxes of sandals to be shipped to Europe.

Redundant factory worker in southern China
Many now unemployed young workers are going back to their villages
"Everyone is quite worried. Not just owners, but workers as well," says Sergio Sum, the director of Top Sun Manufacturing Co Ltd.

Many workers are now having to go back home to their villages.

Amid the queues of passengers at Guangzhou railway station, one group of young women sits on top of piles of bags and cases. Each of them has the same frizzy hairstyle.

One sends text messages on her mobile phone, which is decorated with pendants. These women used to work in a television factory, until the factory started running out of cash.

"We used to work overtime," says one of the workers, who declines to give her name. "But then, we were told to work one day and take one or two days off. Finally, we weren't even getting a basic salary."

The long lines at this railway station will make China's government nervous.

The Communist Party has stayed in power partly because it has made poor people richer. But now the world's financial crisis has arrived.

So, what happens in this country if hundreds of millions of workers no longer feel they can get a better life?

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