Delta towns down and out as factories close
Fenggang's shopping boulevard in better times used to be bustling with factory workers buying groceries, clothing and other necessities.
Now, on most days it is a virtual ghost town festooned with posters promoting 'urgent sales', 'shutdown sales' or even 'financial crisis sales'.
Fenggang, under the jurisdiction of Dongguan in Guangdong province, has seen its lifeline severed as the global economic crisis hits exports and forces hundreds of factory closures across the region. More than a million workers have been left jobless.
A rural backwater 30 years ago, Fenggang is now a cluster of factories making moulds, plastic materials and motors - its success intrinsically tied with world demand for 'made in China' products.
With much of the world in recession, Fenggang and other towns across the Pearl River Delta are in dire straits. Dongguan's economy shrank 2.5 per cent in the first quarter and managed only 0.6 per cent growth in the first six months of this year.
That was a far cry from the municipal government's target of 10 per cent growth for this year and compares with a 14 per cent jump last year and an annual growth rate of 18 per cent between 2002 and 2007.
While half-price T-shirts and shoes at the Fenggang shopping centre attract few buyers, a few kilometres away at the four-storey Fastlane shopping centre, the picture is just as depressing - about 20 people enjoy air-conditioning while watching television in the lobby.
Most of the shops are empty after the franchise owner of the China Resources Vanguard supermarket vanished 10 days ago, prompting 200 staff and suppliers to take to the streets demanding wages and other payments.
'It has become very quiet since the beginning of this year,' said Nan Wen, a driver who has lived and worked at Yantian for the past 10 years. 'About 20,000 migrant workers have returned home to the north.'
Even Mr Nan has been affected. He and 400 fellow staff working for a Hong Kong-owned factory have had their salaries cut twice in the past six months by a total of 15 per cent.
'I used to have a dim sum lunch every Sunday with my children and my wife, but we cook more at home now,' he said. 'The mood is not good.'
Yeung Chi-hung, a Hong Kong manager at a moulding factory in Yantian, said the queues were now shorter at restaurants and it was much easier to find a table at restaurants, especially for dinner.
'Frankly, unless it is for business, the restaurants are so quiet that I'd rather stay at home for dinner,' Mr Yeung said.
One in four migrant workers in Dongguan was made redundant in the first half of the year, or 1.34 million of 5.4 million people, according to Dongguan mayor Li Yuquan.
The accelerated demise of factories across the Pearl River Delta is sending ripples through the entire supply chain. The sudden disappearance of the Hong Kong boss of Biao Luan Moulding and Plastic factory at Yantian two weeks ago is a prime example.
Mr Lin, an executive of a Hong Kong watch factory in the same area, said the unexpected shutdown of Biao Luan resulted in more than 100,000 yuan (HK$113,400) in losses to the factory.
'We had more than 10 moulds each worth over 10,000 yuan locked in the factory and couldn't be retrieved,' Mr Lin said. 'We are only one of many victims [of the global crisis].'
To the west of Fenggang at Changan district - a hub of audio products, garment and shoe producers - there are some signs of a muted recovery but no one is holding out great hope.
'People appear to be returning to shops and restaurants,' said Hong Kong-based British businessman Mark Fenlon. 'It is a bit quiet at the [district] centre but still it is an improvement from the ghost town situation six months ago.'
Despite numerous reports of robberies, Mr Fenlon, who travels to Dongguan once a week, said he did not feel crime was on the rise.
'It's safe walking in a local area, assuming that you put on a pair of jeans that are not too new and do not carry a Gucci bag,' he said. 'And avoid bringing along credit cards and ATM cards.'