The workers of Dongguan are used to Christmas coming early. Summer and autumn are normally the busiest months for those who toil seven days a week in the toy factories in this city in Guangdong Province, the heartland of China’s manufacturing industry. China is the world’s largest producer and exporter of toys, so long hours of overtime are needed to ensure that Christmas presents for children in Britain and elsewhere reach shops by November.This festive season, though, many of Santa’s real-life Elves have no jobs at all.
Since the beginning of 2008, over half of the toy exporters in Guangdong – some 3,900 firms – have gone out of business, according to customs officials.
The economic boom that has drawn millions of workers from all over China to this southern province near Hong Kong is over, as companies suffer the effects of the recession gripping the West. Now, anger amongst the unemployed is on the rise, raising the spectre of social order breaking down in what was once China’s most prosperous region.
Even before the global financial meltdown, China’s manufacturers were being squeezed by rising production and transportation costs, as well as the strengthening Chinese currency, the Yuan. But it is only in the last few weeks that the scale of the crisis has become apparent. Two weeks ago the Smart Union toy company, which made toys for the US giants Disney and Mattel, including Barbie dolls, abruptly shut down its factories in Dongguan. The Hong Kong owners and senior managers vanished, leaving 7,000 people without jobs.
Update: Divorced One Like Bush adds “Smart Union is a licensed manufacturer. Disney and Mattel were just the middle man.”