Global economic slowdown causes unrest in China

Thousands of workers clashed with police Thursday at a shoe factory in the city of Dongguan.

On Tuesday, an equal number of workers went on strike at an electronics factory in Shenzhen. A day earlier, unrest reportedly broke out at a linen company. On Oct. 28, hundreds of workers at a furniture factory in Dongguan took to the streets after the owner disappeared after owing them three months' salary.
The waves of strikes are reminiscent of the riots in the spring and summer of 2010. But last year's riots were caused by rising prosperity and the resulting frustration of young, urbanized workers (mostly migrants from rural areas) who felt empowered and less inclined to tolerate the old order.
The current unrest is linked to the sluggish state of the global economy, especially the European Union, which accounts for one-fifth of all Chinese exports. When orders fell, factories began laying off workers, cutting overtime hours and, in some cases, delaying wages. Some 450 small and medium-sized enterprises closed in the first 10 months of this year. China's central government responded to last year's strikes by increasing the minimum wage. But with inflation at 6 percent, the modest wage increase hasn't solved the problem. And factory managers say the wage increases have virtually wiped out profits, combined with the revaluation of China's local currency (about 10 percent since mid-2010) and a sharp drop in orders from Europe.
The gloomy outlook for the global economy has prompted the World Bank to cut its forecast for China's economic growth from 9.1% this year to 8.4% in 2012.

 

 

 

According to the foreign press for ForTrader.ru