As the global slowdown weakens demand for China's exports, bankruptcies and joblessness are spreading throughout southern China, a main manufacturing zone, the Wall Street Journal reported today. China's customs agency recently reported that half of China's toy exporters that it tracks--some 3,600 companies--were driven out of the market in the first seven months of this year. A majority of those were in and around Dongguan, often called the toy-making capital of the world. Higher prices for energy and raw materials have driven up costs. The Chinese currency has appreciated, which tends to make Chinese-produced goods more expensive overseas. Tougher enforcement of environmental-protection policies has raised costs, as has a new labor law that makes it harder for companies to lay off workers and forces employers to pay for more benefits. Early this year, those trends already were prompting manufacturers--especially those from overseas--to ditch China for certain types of manufacturing, and shift to Vietnam, Cambodia, Bangladesh or Mexico. Read more. (Subscription required.)
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