Global slowdown threatens millions of jobs in China
Up to 2.5 million people could lose their jobs in the Pearl River delta, covering Hong Kong and parts of southern China, by January as a result of the global economic slowdown, a media report said Sunday.
The financial crisis could also bankrupt one-fourth of Hong Kong-owned small and medium-sized enterprises in the next three months, the South China Morning Post quoting the local business group, the Federation of Hong Kong Industries, dpa reported.
"The flow-on effects in Hong Kong will be drastic. It will hit the banks, the service industries, everyone," said federation chairman Clement Chen.
"We are very, very worried about our businesses. Our feeling for the medium term is grave and we believe the recession is going to last for some time," Chen added.
Chen said banks were cutting overdrafts and other credit facilities which meant companies found it difficult to pay suppliers and staff as exports fell.
"We are appealing to the banks not to take the same line with everyone and to examine each business on an individual basis," Chen said.
Several companies have recently said they would close down.
About 1,500 staff of Hong Kong-listed electrical appliance maker BEP International in Shenzhen, which borders Hong Kong, will lose their jobs on Monday (tomorrow) when their factory closes.
On Friday, Hong Kong's third-biggest appliance store chain, Tai Lin Radio Services, shut with the loss of 260 jobs, barely a week after U-Right International Holdings, a garment maker and retailer, went into liquidation throwing hundreds out of work.
Some 6,500 staff of Hong Kong-listed toymaker Smart Union were also left unemployed when the company went into liquidation last week.
The Hong Kong government said Saturday that it would give more financial support for small and medium-sized firms. That includes a loan guarantee package that can be used for operating expenses in addition to capital expenditure.