67000 China factories closed in H1 2008 as global economic collapse takes hold

An export slowdown amidst the global financial crisis has contributed to the shutdown of at least 67,000 factories across China in the first half of 2008. The social problems arising from the slowdown have stirred anxiety in China's government, which has unveiled a $586 billion stimulus package to help create jobs, mostly by building transportation infrastructure.

Due to the mass layoffs, many migrant workers are heading home early for the Chinese New Year, in late January. Many of the 7,000 workers who lost their jobs when a Hong Kong-owned toy factory called Smart Union shut down last month have returned home. Many such factories were run by Taiwanese or Hong Kong managers who fled the mainland.

- Looking back in history, the sudden closure of the Smart Union toy factory leading to 7000 job losses, together with the plunge in global stock markets in the Oct 2008 period, would probably mark the point at which the global economic collapse started, kicking off the Second Great Depression.

As it usually is with such things, few people saw this coming. You know what I was actually thinking at that point? It probably seems funny (or perhaps not) in hindsight, but I was thinking, okay, that was a Mattel factory, let's hope my Transformers are still being churned out by a Hasbro factory elsewhere.

The doomer faction of the peakoilers have been yelling about a fast crash scenario for years, but couldn't quite put down a date to it, while the moderate faction, which I used to count myself a member of, thought it would be more of a gradual decine. Most of the contrarian community looked at China's resource usage and many of us called for massive price inflation and commodity price increases and we called it exactly right, at least for a while.

I myself muttered a few times about China hitting a brick wall. We're way past that now. We're looking at the train wreck. What's next from here? I'm with the doomer faction this time round. I've upgraded my doomerosity level from 6 to 8. It's body count time.

October 2008 was just the beginning. Earlier I said that 2008 was going to be the Year of Inflation. Okay, we got that. If this keeps up, and all indications are that it will, 2009 is going to be the Year of Collapse.

Post a Comment:

Comments are closed for this entry.

« Citigroup to cut... | Main | Peak Oil : IEA repor... »

Most popular blog postings on lowem.log :

1. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Honda Civic Hybrid preliminary specifications released
4. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004
5. How to insert currency exchange rates into Google Spreadsheets
6. Singapore : Nuclear power not ruled out
7. Live spot gold price quotes chart on COMEX
8. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option

Featured articles on lowem.log :

1. 2010 Honda Civic Hybrid preliminary specifications released
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
4. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
5. New efficient nanotech materials may boost enhanced geothermal power systems
6. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
7. Singapore property market recovery seen as private home sales surge 52% in Jul 2009
8. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004

Custom Search