China: City of Dongguan to support companies undergoing restructuring

5 March 2008

Guangzhou, China, 5 March – The government of the city of Dongguan plans to provide funding of 1 billion yuan each year to Taiwanese companies that have to restructure in order to remain in business, a report in the China Daily newspaper said, citing deputy mayor, Jiang Ling.

The measure aims to support labor-intensive businesses that have to restructure in order to pay a higher minimum wage, stricter state environmental protection rules, power cuts and a lack of workers, rises in the price of raw materials, the higher value of the yuan and a new labor contract law.

According to official figures, around 40 companies with foreign capital left the city last year, a figure which rose to 244 when taking into account the whole of Guangdong province.

The director of the Department for Foreign Trade and Economic Cooperation, Liang Yaowen, said that a further 28 companies were preparing to leave the province.

However, according to newspaper Nanfang Daily, of Guangzhou, most of the companies were small and employed a total of 13,000 people, and their owners were from Taiwan and Hong Kong.

Liang added that at the end of last year, 66,789 foreign companies were registered in the province, 61,999 in 2006 and 58,762 in 2005. (macauhub)