China’s bosses are abandoning ship

Financially troubled plants are being abandoned by the boss, leaving behind unpaid workers and debts.

By Don Lee
November 03, 2008 in print edition A-1

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.”

Government statistics show that 67,000 factories of various sizes were shuttered in China in the first half of the year, said Cao Jianhai, an industrial economics researcher at the Chinese Academy of Social Sciences. By year’s end, he said, more than 100,000 plants will have closed.

This cannot be good.

If this is happening in China's booming economy what will happen in America?

Are orders for new goods this low?

Sorry, here is the link to the above story.

articles.latimes.com...

It was America that affected them ,
I guess there trying to drop the US dollar now.
look into the companies going bankrupt in USA , you'll be surprised.

Please post a link to the story, I will like to read more into the article.

Thanks, for the link.

[edit on 3-11-2008 by marg6043]

Well I would never expected that China good luck and finanical boom will be short lived.

Can you imagine if China stop lending money to our government? because they are having financial problems.

This is going to be very interesting to watch.

Sorry for posting in such haste I was trying to get my six year old onto the school bus.


The tidal wave that will ripple through the new economy is just beginning. Having worked with Wal Mart (not for) in Bentonville Arkansas I have a little idea of the buisness that is done with China and America.

Many buyers from WalMart spend 2 months of the year in China and 10 months talking to China. Now take that, multiply it with every other retail buyer in America and you will get an idea of the relationship.

I remember when Nixon was first beginning to talk to China a "seer" by the name of Jean Dixon, or something like that, said that we as Americans would see the importance of it in the coming decades. This was a very bold statement at the time as China was considered the enemy.

My, how times have changed and my goodness, how they are going to change in the coming weeks.

Anyhow...

If the downturn is that severe then we must have the higher ups being very hush hush about it.

Just plane scarey is what it is.

edit If you you look at the end of the Reinhart thread this article was posted as well.


[edit on 3-11-2008 by whiteraven]

Many of the problems with China is the lack of regulations within the government that makes China so attractive to corrupted American companies to do business in that nation.

They can get away with a lot, but right now the ripple effect of the lack of regulations is taking its toll.

The wave of tainted items been exported to America is not having a good impact on the consumer in this nation that is use to be protected by our own laws.

Now the latest problem with melamine is just another smear on Chinas products, then take the holidays and remember that most of our toys are made in China.

Again the shadow of poisoned products including toys are not going to be taken lightly by the American consumer after the fiasco with Chinas own milk products and the death of so many babies.

If china can not protect their own children how can they protect the Children in America.

That is for the American government and regulations to do.

Good for China after all the US and European Governments have already done this to their citizens however it was a bit more indirect than this. Who do you think is going to pay for all of those bailouts passed, Jesus? Printing money creates debt and poverty just like factories closing in China the difference is we(Americans and Europeans) don't feel or see the effects for a longer period of time. China's approach to this problem seems to be more capitalistic than our socialistic approach. You have to love it when the US travels the socialist route of economics while the Chinese stick to laissez-faire capitalist economics. God Bless the PRC AKA the Peoples Republic of China. May freedom live on!

Anonymous ATS, even when your post doesn't show yet I have to agree with you.

You are right, but remember that China is just emerging as a economical power, we did the same the first time around remember during the great depression?

We allowed banks to go down but then our economy became nothing but a hollow shelf of revolving debt, the reason now our government is bailing out the financial and the elite is because our entire economy is nothing but an illusion of prosperity backed by debt.

China perhaps in a future will fall in the same hole that America has fallen when greed takes over.

[edit on 3-11-2008 by marg6043]

Toy makers are among the hardest hit. More than 3,600 such factories have closed — about half the industry’s total, government figures show. Most were small operations, but last month Smart Union Group’s three huge factories stopped production, leaving more than 8,700 workers jobless

If toy orders are down that means Toys R US and Wal Mart, the two largest toy retailers are gearing down.

Apparently September has been a brisk month for exports but at a loss to China.

Points toward some good bargains this season. I have my eye on a 50 Plasma. I expect the street price to be around $600. street for entry level!!

By the way, look at this link.

It is called pressdisplay and works like a newspaper.

Nice for old farts like myself.

www.pressdisplay.com...



The China article was on the front page but it may have moved.

Go to LA times.

[edit on 3-11-2008 by whiteraven]

Originally posted by whiteraven

This cannot be good.

This can be good, but only when the number of idle factories in China at least triples and it stays that way forever an ever. China has contributed a lot to the world demand for oil and to the raising prices of gas.

When Chairman Mao was at the helm, Chinese rode bikes en masse nicely contributing to the global clean air to the chagrin of the US automakers. So General Motors sent one of its best salesmen -- I think his name was Nixon -- to climb the Chinese Wall and scout the market territory.

Russia and China accounted for a huge number of people living under orthodox communism and were out of the global market reach. That's why Detroit never liked communism. Since no one can run a victorious dash for the White House without the big-time business support, the American people began to despise communism as well and decided to defend their made-in 1776 freedom with very expensive, state of the art weapons systems. (There was always a way to circumvent and make a buck out of Marx and Lenin.)

I think that Schwinn and other bike-making companies are keenly following the news about Chinese factory closures.

Does the brain and washing machine in your avatar glorify fuzzy logic?!

I like it.

No Nixon was not the salesman. He was the "CEO" or "CIC". The salesman was none other then Kissenger and G.W. Bush when G.W. was the ambassador to China.

I would love to be a fly on the wall during those little talks. They would have proved to be as interesting as the SALT talks.

Peace
WR

I dunno.. might be good.. for us. Perhaps if we are unable to easily obtain all the items we currently get via China, it will open up jobs in the States. I've about enough of the shoddy, unsafe products out of the mass-manufacture factories in China.

More jobs for U.S. is a great thing for our economy.. I am not too upset by this story.

Originally posted by whiteraven
No Nixon was not the salesman. He was the "CEO" or "CIC". The salesman was none other then Kissenger and G.W. Bush when G.W. was the ambassador to China.

It was George Herbert Walker Bush, Not GWB and he was an envoy to China, not an ambassador. He had served as a US ambassador to the general United Nations prior to Ford nominating him to be the special envoy to China. Just making sure to clear up that little error before you get swamped in nonsense about Dubya having been an abassador.

Originally posted by whiteraven

Financially troubled plants are being abandoned by the boss, leaving behind unpaid workers and debts.

By Don Lee
November 03, 2008 in print edition A-1

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.”

Government statistics show that 67,000 factories of various sizes were shuttered in China in the first half of the year, said Cao Jianhai, an industrial economics researcher at the Chinese Academy of Social Sciences. By year’s end, he said, more than 100,000 plants will have closed.

This cannot be good.

If this is happening in China's booming economy what will happen in America?

Are orders for new goods this low?

Cmon I know some of you expected and saw the warning s signs of these trends months and or years ago. You had to know when they told us that we are getting switched over to a new currency thew were going to collapse certains area markets involved in international trade both home and abroad, what I would be more interested in knowing is who will be buying up the assets and market share.Look beyond the surface effects.

Yep, thats who I mean when I say Walker...my quirk from the 1970's and 80's before the real G.W.B (son) came into my zeighiest.


Envoy to China
Gerald Ford, Nixon's successor, appointed Bush to be Chief of the US Liaison Office in the People's Republic of China. Since the United States at the time maintained official relations with the Republic of China on Taiwan and not the People's Republic of China, the Liaison Office did not have the official status of an embassy and Bush did not formally hold the position of "ambassador", though he unofficially acted as one. The time that he spent in China—14 months—were seen as largely beneficial for US-Chinese relations.[11]

And yes, you are correct when you say envoy.

I always took hime as the ambassador, and who says ATS is not educational.

Peace
WR

[edit on 3-11-2008 by whiteraven]

The logic that if it is happening elsewhere, then it should be happening some time soon in the USA. Wrong.

These emerging economies, became emerging because of their relationship with America. They decided we didn't give enough and should made to suffer and it backfired. Bigtime.

Surely it should be becoming clearer that destroying America is in noones best interests. Or are people so blinded by hatred and jealousy that they are willing to continue with this suicide mission to destroy this country.

I suppose when they have nothing left to commit to their war, then I can get some sleep.

Originally posted by whiteraven

Financially troubled plants are being abandoned by the boss, leaving behind unpaid workers and debts.

And some bosses in financially successful plants are taking the money and getting out while the gettin's good. (I put up an ATS news thread here.)

Perhaps the "Chinese Century" is over before it started? It shouldn't be a surprise, though, that Chinese fortunes were ultimately tied to the US market. Probably also shouldn't be a surprise that lax safety and environmental practices will come back to bite you in the end...not unlike lax accounting and financial practices in the US.

Originally posted by LetsPlayFeedTheGater
It was America that affected them ,
I guess there trying to drop the US dollar now.
look into the companies going bankrupt in USA , you'll be surprised.

no
i think what affected the downturn in China is the melamine in food for pets and babies and in general, and the lead in toys and the unsafe levels of outgassing in furniture - and the list goes on

if not for those - Chinese economy may not have a downturn at all

I dont go into a Chinese goods shop any longer and I am sure lots of others dont go into those shops either and I look at labels and if it says it is made in China I buy the other one, always