The corporate management division of Toshiba Corporation Japan in Dalian, China, announced that on Sept. 30, it would close the factory. Toshiba Dalian factory will lay off more than 1000 employees. In addition, Samsung’s shipyard in Ningbo will close, causing thousands of employees to protest, demanding reasonable compensation.
According to many mainland Chinese media channels, citing an employee with nearly 20 years working at Toshiba Dalian factory, on Aug. 13, the factory management summoned a congress with about 1000 participants. It said the factory would close on Aug. 30 and announced a plan for employees to quit.
Toshiba’s move follows the closure of its TV factory in Dalian in 2013.
Labor costs of enterprises increase
A chief financial scholar said that one factor that forced Toshiba to withdraw its business from Mainland China was the high cost of doing business.
He said: “The problem … labor costs have risen to a level that is surprising. In addition, the Chinese government makes one move to say hello to Japanese and European businesses, but in reality a lot of policies are very unfriendly.”
According to an employee in the Toshiba Dalian factory, workers’ monthly salary is about $464 (3,000 yuan).
Toshiba Dalian Co., Ltd. was established in 1991 and had 30 years of history in China.
Reports are that Toshiba Corporation will close 33 factories and research institutions in 24 cities in China by the end of December this year. The research and production agency for precision components will move to Japan, while the electrical appliance production line will move its operation to Vietnam.
In addition, Samsung Ningbo Shipyard belonging to the Korean Samsung Group, is also closing. Thousands of employees of this factory did not agree to the company’s compensation plan, and on Sept. 9, they raised banners and marched to protest.
Many photos at the scene showed factory employees gathered inside, holding banners reading, “Samsung is my home, I need a job! I need to feed my family!”, “Samsung crosses the bridge, doesn’t care about worker life,” etc., to protest the factory closure.
In an interview with Radio Free Asia (RFA) on Sept. 14, Mr. Quy Phong (Ji Feng), an independent scholar in Beijing, said that under the influence of the political and economic environment in China, transnational companies successively decided to withdraw from China.
Mr. Quy Phong said: “Toshiba and Samsung will probably withdraw completely by the end of the year. Currently, it needs to be divided into several aspects.” One factor is China’s worsening economic environment. “Educators can see, they worry that tomorrow disaster will fall on their heads,” he said.
Mr. Quy Phong said that the governments of Japan and the United States encouraged businesses in China to return home, thus speeding up the withdrawal of foreign investment.
According to a statement circulated online, Samsung’s management explained that the shipyard’s closure was due to the epidemic, which caused a sharp drop in orders after its rescue measures failed. As a result, the only way left is to dissolve the company first. Samsung moving production out of China is a follow-up to its withdrawal of phone factories from Shenzhen, Huizhou, and even the only TV factory in China located in Tianjin.
Public documents show that Ningbo Samsung Heavy Industry Company is Samsung’s No. 1 shipbuilding and unloading factory in China. The company was established in Dec. 1995, with a total registered capital of $250 million. Currently, it has more than 4,500 employees.