Three More HK-Linked Firms Close Doors In China

It said local officials had decided to pay workers 2 million yuan.

Three more Hong Kong-linked companies have shut in southern China, newspapers reported on Wednesday, as the global economic crisis worsens the outlook for exporters in the once-booming region.

Hong Kong-funded Chong Yik Toy Co shut its factory in the city of Shenzhen, leaving hundreds of workers unpaid as it joined the queue for emergency support from the local government, the South China Morning Post said, quoting a district labour official.

The company employed some 900 workers in Longgang district and the local government had paid the workers 3.4 million yuan ($497,300) in emergency funds, the newspaper reported.

Kong Sing Electronics, another Hong Kong-funded company, closed its factory in Shenzhen, leaving 900 people jobless, the Apple Daily reported, quoting local government authorities.

It said local officials had decided to pay workers 2 million yuan.

At another factory in Xixiang, also in Shenzhen, more than 600 workers staged a sit-in for the second day on Tuesday at a factory linked to luxury watch retailer Peace Mark, the South China Morning Post said.

A worker said the company owed 700 staff about 5 million yuan, the newspaper said.

Trading in Peace Mark's shares has been suspended since August and provisional liquidators have been appointed for the Hong Kong-based watch retailer.

The closures come a week after Hong Kong-listed Smart Union shut its factory doors in Guangdong province, leaving thousands jobless and sounding a warning for Chinese factories which survive on a precarious diet of loans as they compete for foreign orders with wafer-thin margins.

The government in China's manufacturing heartland of Guangdong may set up a fund to help workers laid off amid the global economic turmoil, state media said on Monday.

A string of bankruptcies in Hong Kong shows the days of easy money are over and more collapses are likely if firms fail to manage their debt loads. Officials and economists have warned that the worst has yet to hit.

Among the victims, garment maker and retailer U-Right International, Peace Mark and swimsuit maker Tack Fat Group have been placed under provisional liquidation.

Home appliance maker BEP International said last Friday it had shut down a unit, Bailingda Industrial (Shenzhen) Co Ltd, which may face liquidation.