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High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. China slowdown: feeling the pain in the Pearl River Delta | beyondbrics
By Zhou Ping
Chinas overall GDP figures give reason enough to worry about its economic slowdown (or Chindown). But the story is even more worrying at a local level.
In Dongguan, a manufacturing hub in Guangdong province, GDP growth in the first half of this year hit a three year low. Its expansion of just 2.5 per cent shows the pain China factories are feeling as the engine driving the worlds second biggest economy begins to misfire.
Guangdongs purchasing managers index in July also fell for a fourth consecutive month to 50, slightly lower than the national reading of 50.1 (where the 50 mark differentiates contraction from expansion).
Small and medium sized enterprises are suffering most in the slowdown. Nearly half of the guarantee companies in the Pearl River Delta are losing business, according to the Security Times, citing a survey by the Guangdong Credit Guarantee Association. The guarantee businesses fell by 25-30 per cent, suggesting a sharp reduction in the finance available to SMEs in Guangdong.
Credit guarantee companies are not willing to bear the high risk of guaranteeing corporate debt in an uncertain economic outlook, said Li Sicong, executive chairman of the Association.
In an attempt to help SMEs that have failed to get loans from banks or other agencies, local governments in Zhejiang province are launching emergency funds to prevent a massive shutdown, according to China Daily.
Dongguan is hardly alone. In Shenzhen, the border city across from Hong Kong, demand for labour has weakened rapidly. Statistics from Shenzhen Human Resources show employment demand declined by nearly 50 per cent in the second quarter compared to 2011, as Southern Metropolis Daily reported. The newspaper reported there were 110,000 vacancies in June this year, down from 210,000 in June 2011.
Link:China slowdown: feeling the pain in the Pearl River Delta | beyondbrics
By Zhou Ping
Chinas overall GDP figures give reason enough to worry about its economic slowdown (or Chindown). But the story is even more worrying at a local level.
In Dongguan, a manufacturing hub in Guangdong province, GDP growth in the first half of this year hit a three year low. Its expansion of just 2.5 per cent shows the pain China factories are feeling as the engine driving the worlds second biggest economy begins to misfire.
Guangdongs purchasing managers index in July also fell for a fourth consecutive month to 50, slightly lower than the national reading of 50.1 (where the 50 mark differentiates contraction from expansion).
Small and medium sized enterprises are suffering most in the slowdown. Nearly half of the guarantee companies in the Pearl River Delta are losing business, according to the Security Times, citing a survey by the Guangdong Credit Guarantee Association. The guarantee businesses fell by 25-30 per cent, suggesting a sharp reduction in the finance available to SMEs in Guangdong.
Credit guarantee companies are not willing to bear the high risk of guaranteeing corporate debt in an uncertain economic outlook, said Li Sicong, executive chairman of the Association.
In an attempt to help SMEs that have failed to get loans from banks or other agencies, local governments in Zhejiang province are launching emergency funds to prevent a massive shutdown, according to China Daily.
Dongguan is hardly alone. In Shenzhen, the border city across from Hong Kong, demand for labour has weakened rapidly. Statistics from Shenzhen Human Resources show employment demand declined by nearly 50 per cent in the second quarter compared to 2011, as Southern Metropolis Daily reported. The newspaper reported there were 110,000 vacancies in June this year, down from 210,000 in June 2011.
Link:China slowdown: feeling the pain in the Pearl River Delta | beyondbrics
