Friday, January 22, 2016

The New Crash? - “Things are bleak,”

Tangshan, 200km south-east of Beijing, a city of about seven million inhabitants in Hebei, China’s steel-making heartlands. It rose from the ashes of a devastating 1976 earthquake that is said to have claimed 250,000 lives to become a heavy-industry powerhouse, propping up a massive Chinese construction boom and churning out more steel in 2014 than the whole of the United States. These days are apparently now over. The Fufeng steel plant on the outskirts of Tangshan, a once booming industrial hub about 200km south-east of Beijing, there is scant sign of those glory days.

Fufeng’s steel plant owners declared bankruptcy early last year – laying off about 2,000 workers and sparking protests in the process when in 2015 disgruntled former workers gathered to demand unpaid wages with police facing off with demonstrators

Nearby, another company, China Metallurgical Hengtong Cold Rolled Technology, also lies abandoned. Like many others in the region, has been forced out of business by massive over-capacity and plummeting demand.

Parts of Tangshan’s once bustling industrial sprawl have taken on the appearance of ghost towns. Homes vacated by laid-off workers have been sealed up with metal sheets.

Steelworkers who still have jobs complain their salaries have been cut as steel prices fall, government support is withdrawn, and their employers struggle to stay afloat. At the nearby Guofeng mill, which is still operating, but only just, pay has been cut by 25%.
“Life is really hard right now,” an employee complained. “Everything here is about steel. If it shuts down, it’s over. If our mill closes, we will have no land, no money and no work.”

Fan Jiangqiang explains that the region’s halcyon days had come in 2008 and 2009 when business was booming.
“The supermarkets were always full of people. Many businesses opened up. People would go out to karaoke and for drinks. People consumed a lot,” Fan recalled. “But right now, things just keep going down. More and more companies are going bankrupt.”

Cui Jianjun, who sells chickens said: “When the mills were operating properly lots of migrants would come here to work. Now the mills have closed, they’ve gone home. My business has suffered.”

China Labour Bulletin (CLB), a Hong Kong-based campaigning group which monitors such unrest, recorded a dramatic escalation in strikes and worker protests towards the end of last year. Across China there were 2,774 incidents in 2015, double the previous year’s figure of 1,379 incidents. “All sectors of the economy are clearly experiencing problems,” said CLB’s Geoff Crothall. “And the reason the workers are going out on strike and staging protests is simply that they have no other option.”  Crothall said that of the 51 “incidents” in Hebei province last year, 15 had been related to the depressed steel industry, with a very clear upsurge in the last quarter of 2015.

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