Sunday, November 16, 2008

A Tiny World

With the global economic downturn, John kept thinking that Shanghai did not seem the same hustle and bustle when we lived there. All he had to go on was the market index and unquantified reports of drop in real estate prices.

Today I happened to sit next to a young sales manager from Huzhou population 2.7 million. He works for a company that makes a component for compact florescent light bulbs. His clients are bulb manufacturers whose products end up on shelves at Walmart, Home Depot, etc. His company is at 500 workers, down from 600 plus at the height. Sales are down 30%, $1.4M to $1M. Companies that rely mostly on US exports are struggling to stay in business at all, not to mention production cuts and layoffs. Restaurants that used to be frequented by local businessmen are hurting. Under the direction of their county manager, the whole county is keeping their eyes tuned to CCTV (State television) 2 which now reports on business news directly from Wall Street, as it had rarely done before. Everyone is holding their breath, hoping the downturn will be a short lived one.

My seatmate also told of a government bailout of a stuffed animal manufacturer in Guangdong that employed thousands of workers, paying back wages and placing workers in other sweatshops. This reminded me of a friend in Shanghai had mentioned that her aunt used to be a in partnership that made nylon flags and windsocks for export. The partnership is now folding and looking to invest into an organic farm.

The world has never been this tiny.

1 comment:

Anonymous said...

Indeed. This is very interesting to read! - Yuan