News are out about China shutting down thousands of factories as part of their new environment protection policies. Let's have a look on what this means.
Pros and Cons
Who's benefiting from this?
Reduced air pollution and raised awareness for environmental protection. Chinese citizens are definitely benefiting from this new policy with factories pausing its production lines, less
Who are the victims?
Is your trade deal safe? It may be obvious that those factory owners who are in the middle of completing their latest deals will have to find a way to finish their business before going broke. But China leaves no time for them to do that finishing touch. There's absolutely zero tolerance to all-night-ups when they say no one works whilst a factory is under inspection. No information was given until a family friend told us he received a government warning letter after trying to catch up on the progress of their latest, and potentially the last deal. The letter stated if they return to work during this period of time again, the owner will be arrested. And by saying "this period of time", it most likely meant forever. This abrupt notice not only gave my family friend an almost-heart attack, but also left their clients in the west waiting and worrying, what more can they do?
Photo taken during factory visit in Shanghai
So what's behind the factory shutdowns? If it's really an environmental concern then why only shutting down privately run business but not state owned factories? Here are some brave guesses of what might be the reasons behind:
- China wants to rebrand itself and change its image of world's factory to a more technology advantaged, service based country
- China is strategically responding to and preparing for the potential US trade war
- The country no longer needs production and manufactory abilities for survival
- Factory based economy is on the down run, China wishes to protect state-run business by shutting down private factories and eliminate competitors
We don't know what's really happening there, let's hope for the best for those factory owners who has deals on hand and waked up into a nightmare.
Related topic: Foreign business exiting China and moving their factories to South Asian countries such as Thailand, Cambodia and Indonesia.
Photo taken during factory visit in Shanghai
Hyperlink:
China “EPA” crackdown shuts down tens of thousands of factories… with no end in sight
Asicentral: Factory Production Disrupted Throughout China; North American Suppliers Affected
NYTimes: Nearly 14,000 Companies in China Violate Pollution Rules
Jacob Yount: China Factory Closures for Pollution Review
http://jacobyount.com/china-factory-closures-pollution-review/
Foreign Affairs: China's Factory Shutdowns
https://www.foreignaffairs.com/gallerys/2017-05-10/chinas-factory-shutdowns