We are all going to feel the pinch.
White collar workers at Chinese branches of many multinational companies are now facing increased pressures and reduced salaries as their headquarters cut daily expenses to cope with the current global financial meltdown.
The crisis dealt its first blow by causing the closure of two toy factories in southern China’s Guangdong Province in mid October. The move resulted in a loss of over 6,000 jobs. Since then, more businesses in China, especially multinationals whose headquarters are in the center of the financial storm, are facing tough times.
The recession in the financial market hit most companies that make a profit from banks and financial companies. Wen Xiang, a mid-level manager at an American multinational company in Beijing, says he feels increased pressure in his job with his headquarters expecting more output despite scaling back on expenses.
Wen said his US-based headquarters wrongly expect businesses in China to remain strong, and are therefore pushing even harder on the local branch.
“But business has actually seen a decline with lesser demand. That means more responsibilities and less money to spend,” Wen said.
So, so, so many Western companies have hitched their stars to China and its 1.3 billion fat-walleted customers. And now they’ll be looking to their China offices to pull rabbits out of hats. China! That’s the answer! The one place where we can still make a big profit. The China Dream lives.
They’re all going to have a hard time of it because China’s getting hit, too. Not nearly as bad as Europe and the US, and it at least has the cash surplus to buy its way out of the hole – but it’s still going to suffer. Maybe the only recession-proof business out there is running a funeral home. And that’s not funny; I remember in Hong Kong when unemployment hit 8 percent in 2001 and young men were killing themselves rather than lose face over having to apply for welfare. It was around that time that i first decided to move to China where, you know, recession is impossible.
Richard Burger is the author of Behind the Red Door: Sex in China, an exploration of China's sexual revolution and its clash with traditional Chinese values.