Sudden factory closures raise fears for Pearl River Delta's electronics manufacturing sector
Sudden shutdowns follow drop in demand and company relocations
The sudden closures of several factories in the Pearl River Delta after the "golden week" national holiday have fuelled concerns the region's electronics manufacturers are losing out to foreign rivals.
The shutdowns come amid a drop in foreign demand for electronic information products. In addition to the slump in exports, rising costs at factories in Guangdong are prompting companies from Hong Kong, Taiwan and overseas to withdraw from the province and relocate their operations to neighbouring countries.
READ MORE: Manufacturers step up search for low cost alternative to China
A mobile phone factory belonging to Jingchi Plastics in the Fenggang township of Dongguan appears to be the latest victim. On Saturday it announced it was shutting down, leaving debts of 30 million yuan (HK$37 million) to hundreds of suppliers and 80 workers, the reported.
The owner said he first set up business in Guanlan in Shenzhen before expanding to a factory in Dongguan in 2013 with more than 1,000 workers. "Orders have suddenly gone because of the worsening economic situation. Medium and small enterprises of our kind are finding it very hard to survive," he said.
That closure came just a day after more than 4,000 workers and suppliers turned out in front of the Longgang district government building in Shenzhen to protest against the abrupt closure of Fu Chang Electronic Technology, an electronic parts supplier to domestic telecommunication giants such as Huawei and ZTE.
