Tuesday, November 4, 2008

Chinese Factories Closing by the Tens of Thousands (67,000 Were Closed In The First Half Of This Year)

The Los Angeles times has a story about how factories in China are closing at an alarming rate.

First, Tao Shoulong burned his company's financial books. He then sold his private golf club memberships and disposed of his Mercedes S-600 sedan.

And then he was gone.

And just like that, China's biggest textile dye operation -- with four factories, a campus the size of 31 football fields, 4,000 workers and debts of at least $200 million -- was history.

"We're pretty much dead now," said Mao Youming, one of 300 suppliers stiffed last month by Tao's company, Jianglong Group. Lighting a cigarette in a coffee shop here, the 38-year-old spoke calmly about the bleak future of his industrial gas business. Tao owed him $850,000, Mao said, about 60% of his annual revenue. "We cannot pay our workers' salaries. We are about to be bankrupt too."

That is pretty messed up, even China Printing & Dyeing Holding Ltd went belly up.

If the US is in a recession the whole world soon follows.

If Obama wins today then India will fall big time too, Obama doesn't like the outsourcing business and might start penalizing companies who do so.

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