China’s makers stave off trade war job losses – but for how long?
- Service sector has absorbed many workers laid off during the slowdown and trade conflict, but manufacturing jobs may drop more sharply in 2019
- Labour situation much worse at smaller firms than larger companies
China’s private sector, the driving force behind the country’s economic miracle over the last 40 years, is struggling amid the Chinese government’s campaign to reduce national debt and the trade war with the United States. This is the fourth story in a series that will detail the challenges private firms face and outline the government’s attempts to address them.
It’s a frustrating time for Chinese furniture makers like Jason Chen, whose meagre profits have fallen victim to the US-China trade war. But the dark cloud of that conflict has one silver lining: good technical workers are no longer so hard to find.
Chen, who manages two factories that make wooden frames for sofas and tables in eastern China’s Jiangsu and Zhejiang provinces, has not had to lay off any of his 600 staff despite the blow to his business. He was fortunate to have a mostly independent supply chain, but still had to scale down the workforce in the smaller factory and move them to the bigger factory to save costs.
In late October, he hired two experienced sample makers laid off by other factories. Their salary demands were “not too high”, because there were few other jobs to be had.
However, not everyone is fortunate and capable enough to spread risk among different baskets.
“If between half and 70 per cent of one’s business comes from the US market, then it’s hard to survive,” Chen said. “I estimate that small manufacturers with fewer than 200 employees will disappear after January.”