A major crisis is beginning to unfold in Guangdong; China's manufacturing hub

A major crisis is beginning to unfold in Guangdong, China's manufacturing hub. Recently, Swiss media reporters visited Guangdong Province, which was once regarded as the world's factory, and found that local factories were firing workers in large numbers, while protests by the unemployed were increasing. A crisis is brewing in Guangdong. On December 30, the Neue Zircher Zeitung published the above report by Matthias Kamp, the newspaper's correspondent in China. Guangdong Province is China's most important manufacturing center, but after Kamp's personal visit, he found that many local workers had been fired and protests continued to break out. In the article, he wrote, Guangdong Province was once regarded as the world's factory and the country's economic engine. In Guangdong, workers mass-produce pants, mobile phones, and household appliances. Almost everything that Western consumers need comes from Guangdong. In addition, countless factories serve the domestic Chinese market. But weak domestic demand in China has led to more and more factories in Guangdong closing down. Many Chinese have lost money in the stock market, and the real estate crisis has caused the value of houses to plummet. As a result, people are tightening their purse strings. A survey by the Hong Kong University of Science and Technology found that in Guangzhou, the capital of Guangdong Province, one in five workers currently holds unstable jobs, such as couriers. The article points out that more and more workers are turning their anger to street protests. Data from the U.S. think tank Freedom House shows that the number of strikes across China increased by 27 percent from July to September 2024 compared with the previous year, and sometimes the strikes were accompanied by violence. In these cases, the disputes mostly focused on layoffs, wage arrears, and wage cuts. The protests are usually small-scale and end within a few days. The article states that the top leaders of the Communist Party of China are worried that if the economic situation deteriorates further, the protests may expand into a large-scale social movement. However, at present, the Beijing government has not found a solution to the problem, and the authorities have responded as usual by strengthening repression and surveillance. Guangdong's well-known textile factory lays off 80 percent of its employees. According to Sohu.com, a notice document about a well-known textile factory in Zhongshan City, Guangdong, shutting down some production operations and laying off employees on the 25th of this month was circulated on an internet platform recently, which aroused widespread attention. The document shows that the textile factory stated that due to the merger of production capacity to Vietnam Yongshin No. 3 factory, the Zhongshan factory will only retain the development department, and the machinery, equipment, and personnel configuration will be reduced accordingly. After research by the factory management, it was decided to shut down some production operations on December 25, 2024, and terminate the labor contracts with all employees one month in advance. According to online news, the textile factory laying off employees this time is Guangdong Zhongshan Tengxing Textile Technology Co., Ltd., with a layoff rate of 80 percent. It is reported that Guangdong Zhongshan Tengxing Textile Technology Co., Ltd. is a textile factory that mainly produces casual shoe fabrics, and its parent company is Huali Group. The group is a powerful local casual shoe manufacturing company, and one of the world's leading sports footwear manufacturers. Huali Group's main business is the research and development, manufacturing, and OEM production of sports leisure and outdoor boots, sports sandals, slippers, and other footwear. Its customer base includes well-known brands such as Nike, VF, Decker's, Puma, and Columbia, and its production bases are spread across Southeast Asian countries. Since 2015, the group has been relocating its production capacity to Vietnam and has successively established production bases such as Vietnam Zhengde and Vietnam Yonghong. In recent years, relocating production capacity to Vietnam seems to have become a new trend. For example, Baoyuan Shoes, a shoe giant deeply rooted in Zhongshan for many years, and Oasis Shoes, which has operated in Ho Chi Minh, Dongguan for many years, also plan to move all operations to Vietnam by 2025. In addition, world-renowned sports brands such as Adidas and Nike moved their production capacity to Vietnam years ago. It is generally believed in the industry that Vietnam, an emerging manufacturing country, has more obvious advantages than China, such as cheap labor and low land costs. This means that the overall costs will drop significantly and profits will increase correspondingly. In addition, many large multinational companies are affected by factors such as trade wars and geopolitical conflicts. Ensuring the stability of the supply chain has become a critical consideration for them. In recent years, major economies such as Europe and the United States have offered tariff concessions for emerging manufacturing countries like Vietnam, and Vietnam has also introduced increasingly favorable policies. Under the combined influence of internal and external factors, more and more capital, technology, production capacity and resources have begun to flow into Vietnam. For the workers of these multinational companies, the transfer of factories means unemployment, resulting in a significant rise in the number of unemployed people in Guangdong. Large-scale wage demands and strikes broke out in Guangdong. In 2024, China's wave of wage demands started early, beginning in September and October, and the closer it got to the end of the year, the more protests involving wage demands occurred. According to data released by yiyan.com, a total of 937 protests were recorded in the survey from July to September 2024, of which 41% were labor protests. Protests related to economic demands increased by 27% compared with the same period in 2023. Guangdong province is the area where protests occur most frequently in China. Not long ago, there were large-scale wage demands and strikes by workers. On October 9, 2024, hundreds of workers at Jiuqsingqin Animation Technology Kamertesladet in Dongguan, Guangdong, collectively defended their rights due to wage arrears. These workers, who blocked traffic, were violently dispersed by the police, and many were arrested. Some workers stated that they had not received their wages for several months, causing significant difficulties in their lives. The disappearance of their boss left them feeling desperate, forcing them to take such measures to defend their rights. On October 15 of the same year, hundreds of workers at Casmo Factory No. 3 in Dongguan, Guangdong, collectively defended their rights to protest the company's disguised layoffs. Videos from the scene show workers gathered in the factory area, demanding the company protect their legal rights and interests. According to the workers, Casmo may have been acquired, and the company announced a two-month holiday to force workers to resign voluntarily, thereby avoiding compensation. The workers expressed anger and dissatisfaction with the company's actions. From October 12 to 14 of the same year, sanitation workers in Nanantown, Gaoyao District, Jiuqing City, Guangdong Province, went on strike for three consecutive days due to wage arrears. According to the workers, their wages had been overdue for several months to half a year. In recent days, garbage in Nanantown has piled up like a mountain because no one is cleaning it, turning the area into a stinky city. The social situation in China is very sad. The people are short of money. The government is short of money. The banks are short of money. The local governments are short of money. The state-owned enterprises are short of money. The private enterprises are short of money. The people who sell houses are short of money, and the people who buy houses are short of money. If we remove some minors and the elderly, almost everyone is short of money. It is said that the economic development of our country is getting better and better, so why do we have less and less money in our pockets? I usually act quite optimistic in videos, but money can really overwhelm a middle-aged woman. Today something happened that really broke my defenses. My son is having his third birthday today. I wanted to buy him the cheapest birthday cake. I searched the entire internet and found that the cheapest one was 44 yuan, but at this time I only had a little over 20 yuan on my card. At that moment I felt very wronged. Why is life so difficult? I am 37 years old and I can't even buy a 44 yuan cake for my son. I feel so powerless. I really regret it. I spent more than 1 million yuan to buy a house in 2019, but now no one wants it even at 800,000 yuan. It is right next to Wuyue Plaza and I still have hundreds of thousands in loans. I have to pay 4,000 yuan a month for 15 years. If I sell the house, I will lose hundreds of thousands of yuan, which is equivalent to 300,000 or 400,000 yuan. I have no money left. I worked so hard, but now it is difficult to do business and I can't make any money. What should I do? As the economy falls into a downturn, Chinese household assets are depreciating rapidly. According to data from the National Bureau of Statistics of China, in 2024, China's per capita net property income was 3,435 yuan, a year-on-year increase of 2.2%. This is the lowest annual growth rate since 2014. Official data shows that since 2019, the growth of per capita net property income has continued to decline, with the only exception being 2021, when it saw an annual growth of 10.2%. In Shenzhen, the worst-off group has already emerged, revealing a terrible phenomenon. Many people can no longer pay their mortgages. Some houses are sold, but the proceeds are not enough to repay bank loans. If the market continues like this, many people will face serious problems. Salaries have stagnated and those in business can't make money. Incomes have dropped and housing prices are falling. The wind is blowing colder and colder. Selling isn't right, but not selling isn't right either. If you sell, you lose money and spit blood. If you don't sell, you can't pay the mortgage. People trapped in this dead end are in the worst situation. What's even more terrifying is that no matter how much you lower the price, no one is interested and you simply can't sell. A penny can make a hero fall. Last night, I had a small gathering with a few good friends outside. What we talked about most was everyone's current life and work situation. Two of my friends complained that their monthly mortgage, car loan and credit card payments together require more than 7,000 yuan, not counting daily expenses. One of them now earns 4,000 yuan a month, and his family's total income is about 10,000 yuan. By Yulin's standards, this isn't a low salary, but he said that sometimes he still feels completely overwhelmed. This is not just a consumption downgrade. It's a collapse. Stores are suddenly empty. The phrase, no one in the store has become the most discussed topic. The clothing industry was hit first as people stopped buying clothes. In 2024, it faced its worst crisis, with both physical and online sales plummeting. My father-in-law's salary was cut twice in one year. He avoided layoffs, but not pay cuts. Today, he sits silently on the balcony, lost in thought. After being laid off twice, I became a full-time mother. Our family depended on his income, but now, with a shrinking paycheck and a mortgage to pay, the pressure is immense. I can tell when a restaurant is about to go bankrupt. Every day, I talk to desperate owners who know they won't last a year. Some ask for help selling their businesses. Others just want to hand over everything in exchange for one month's rent. How did restaurant owners become this desperate? Chinese residents' net property income is declining, reflecting the shrinking wealth of the middle class. In Beijing, per capita net property income has fallen for three years, dropping 0.6% in 2024 to 12,205 yuan, over one-fifth of the average wage. Four months ago, I was a respected doctor in Beijing. Now, I'm drowning in debt. I sold everything but still owe nearly 10 million yuan. My watch, worth 130,000 yuan, is all I have left. I can't escape my creditors, and life has never felt harder. Many are actively returning to poverty. My family left Beijing for Fuzhou, saving nearly 500,000 yuan a year. Instead of chasing higher income, we chose a cheaper lifestyle. Even our approach to education changed. Once set on private schools, we now appreciate public schools. As a Beijinger, I see the truth behind the economy. Most people I know have little to no savings, some even in debt. The illusion of wealth, luxury cars, and watches is just that. A family burdened with debt faces not just financial strain, but a complete deterioration in quality of life. Today, while drying quilts outside, I met Ma Su. She asked to borrow 10,000 yuan. Years ago, her husband's income made us all envious. They bought a Beijing home for over 2 million yuan, but now, with its value halved and her husband jobless, they're struggling to pay the mortgage and arguing over money. With real estate crashing, the middle class is crumbling. Many who emptied their savings for homes are now bankrupt. My husband and I worked 16 years in healthcare, lost 1 million yuan on a house, and paid a nine-year mortgage in vain. We never even took a holiday, yet we lost everything. If Zheng Cheng's housing market keeps falling, countless families will collapse. Many are already drowning in debt, their assets worthless. Auctions of old and luxury homes are rising as people lose jobs and businesses. They simply can't repay their loans. China's economic depression has left many middle-aged people jobless. It's too hard. As China's economy continues to decline, unemployment has swept across all industries. Many middle-aged workers have been laid off and are struggling to find new jobs. Burdened by mortgages and car loans, they lament, losing a job in middle age is just too hard. Many unemployed middle-aged Chinese have turned to social media to share their struggles, resonating with netizens. A netizen named Xiaolong Haring posted a video saying he was 36 years old and had been unemployed for over a year. He previously worked in software implementation and other roles at insurance companies, but after losing his job, he has been unable to find a suitable position. To keep up with mortgage payments, he has resorted to delivering takeout and selling grilled sausages at a street stall. In his video, Xiaolong Haring said, Being unemployed in middle age is incredibly tough. I feel anxious all the time and don't know what to do. For a while, I stayed up late every night setting up stalls or delivering food. But after some time, I realized I couldn't wake up in the morning, felt dizzy in the afternoon, especially in the middle of a delivery, and struggled to sleep at night. He added that despite taking medication for days, he still feels dizzy and worries that his body won't be able to handle the strain if this continues. Another netizen, Serving A Good Man, shared his anxiety after being laid off from a major company. He has been out of work for six months, his savings have nearly run out, and he avoids socializing. He even questions whether he has become a complete failure. I keep asking myself lately, have I been forgotten and abandoned by the world? I've been unemployed for over six months and haven't been able to find a job. After returning from the New Year holiday, I couldn't even get an interview. I'm deeply anxious and lost. I don't know when I'll find work or what the future holds. My son is about to start kindergarten. If I still can't find a job, how will I support him? He said. Netizen Chunjie, working hard, posted a video saying she was 45 years old, unemployed and middle-aged, and had elderly parents and young children to care for. However, she couldn't afford to lie flat and didn't know what to do. Choking up in front of the camera, she said that after being laid off, it took her a month to adjust before she even dared to go outside. That month felt like a year. She couldn't sleep at night and was anxious every day. Half of her hair turned white and her weight dropped from 60 kilograms to 49 kilograms.