Some Chinese companies have recently announced the closure of their businesses, citing their losses of orders and the COVID pandemic-related lockdown.
According to Apollo News, some large companies in Guangdong province have decided to suspend their operation over the past few weeks.
On September 16, Dongguan Jiacheng Technology Co., Ltd. and Jiahong Hardware Products Co., Ltd. issued announcements of closure.
These two technology companies were established in 2018, specializing in technology and hardware manufacturing.
According to their statements, they decided to cease production due to the serious reduction of their orders as well as serious difficulties in their production and operation.
Their announcement also stated that they are now unable to pay economic compensation to employees.
At the end of August, Goodway Electrical Manufacturing Shenzhen Co., Ltd., just announced its suspension of production. The company was established in Shenzhen in 1986, producing household applications.
Aigo Group, a veteran Hong Kong-funded enterprise in Dongguan, also announced its closure.
Two weeks ago, Fulong Electric Manufacturing Co., Ltd. issued a notice to the employees. The company said it has received no new orders and has been losing money in the past few years. It decided to dissolve the company before August 31.
These were some of the enterprises in Shenzhen and Dongguan to shut down due to serious loss of orders in the past three weeks.
Zhang Jianping was once a migrant worker in Jiangsu Province. In an interview with Radio Free Asia, he said that the closure of businesses in Guangzhou, Shenzhen and Dongguan reminds him of the financial turmoil that swept the world in 2007 and 2008. This is a very difficult fact to accept.
Zhang said that a large number of enterprises in Guangdong province have closed mainly due to China’s zero-Covid policy.
Zhang added that some companies have just reflected on their situation but dared not criticize the policy. He said, “This is the most terrible thing.”
Analysts said that a similar wave of business closures is expected to spread to Jiangsu and Zhejiang provinces.
(Mr.) Cai, an industry insider, told Radio Free Asia that the Chinese government’s response to the COVID pandemic has severely impacted China’s export-oriented enterprises.
In particular, those companies that have long relied on the processing of supplied materials are no longer key enterprises supported by the government, and have been regarded as eliminated industries.
Under the impact of factors such as the COVID pandemic, it is difficult for these companies to continue to survive once they lose a large number of orders.
Cai said that, not only in Guangdong province, businesses in Zhejiang, Jiangsu and other provinces that rely on export orders, will end up like this.
Under China’s strict pandemic prevention and control measures, many companies have moved out of China and turned to Southeast Asian countries such as Vietnam.