Hong Kong's cash-strapped exporters in Guangzhou complain that overseas buyers are dealing them a fresh blow by rescinding orders at the last minute or rejecting shipments on delivery in the face of weaker consumer demand.
One Hong Kong industrialist said he was recently forced to sell his two factories in Shenzhen and a Hong Kong office after using up his life savings and assets trying to save his business, which makes leather covers for car seats.
The forced sale was triggered by a US customer who rejected three containers of finished products and refused to pay the bills, citing flaws in the goods.
'I gave up,' he said, as he sold his last asset - his own flat - at a fire-sale price.
'I have spent my life savings, and banks are suddenly recalling loans, asking me to pay the difference between the overdraft loans and the value of properties I pledged for the loans. My biggest worry is property prices, which are falling rapidly.'
Patrick Lam, a factory owner and vice-president of the Hong Kong Small and Medium Enterprises Association, said some manufacturers exporting products to South Korea were exposed to significant currency risks.
