HONG KONG—The global economic crisis has sparked a series of bankruptcies and factory closures in China's once prosperous Pearl River Delta region, with angry workers demanding back pay in increasingly visible unrest.
Around 100 workers laid off by a subsidiary of Hong Kong-listed Peace Mark Holdings, which owns three factories in Shenzhen, staged a silent sit-in this week at the Lo Wu border crossing that divides the southern city of Shenzhen from Hong Kong, in protest at unpaid wages and severance benefits.
The protest began after 600 workers met at the Tianmeide factory in Shenzhen's Longhua township to travel to the border crossing into Hong Kong, a Tianmeide worker surnamed Luo said.
The workers from mainland China are panicking."
"The main target of our protest is the Fulicheng administration company, but we didn't get a result," he said.
"There is a lot of anger about this. We just want them [the company], including the government officials, to talk to the workers face to face.”
The protesters at Lo Wu held banners calling on the labor contracting company Fulicheng to repay what they were owed.
Meanwhile, around 500 workers gathered at the offices of the Tianmeide factory, shouting slogans and holding up banners.
A factory manager surnamed Yan said the workers had yet to receive any salary at all for September or October.
"They offered us a meeting in Bao'an district but no one wants to go," he said. "After we get the arbitration result, the next step will be to take this to court. We will take this to the Bao'an District People's Court in Shenzhen."
“The Hong Kong company has been dissolved. The workers from mainland China are panicking. That’s why we’re protesting today to get our back paid salaries. We are determined. If nothing comes out by Friday, we will protest at the municipal government,” one worker surnamed Song said.
An official who answered the phone at the Xixiang labor department declined to comment. “I have no idea. You have to get the information from a higher level,” he said.
One of the protesters, surnamed Wang, said police were called in as workers blocked trucks and containers from Hong Kong.
“Another big concern is that many workers don’t even have social security despite having worked for the company for a decade,” Wang said.
Labor affairs secretary Xie of the Longhua township neighborhood committee on Dalang Street said he had sent a letter and full documentation to the responsible person at the Tianmeide factory as part of the arbitration process, but had so far received no reply.
"When the arbitration hearing is over, we will look at the documentation submitted by all parties," Xie said.
"Yang Zhisheng is the representative at the Tianmeide factory, so I will see if there is a response from him...If he doesn't respond we will regard him as having waived his right to a say in the decision," he said.
"On the whole, we are supportive of most of the workers' demands."
Watchmaker Peace Mark Holdings went into liquidation in August, and was taken into administration by Fulicheng. Part of its assets have been taken over by Zhoudafu Group, which owns three watch factories in Shenzhen.
Fulicheng said in a statement Wednesday that it was urgently seeking a buyer for the factory, and that it had offered financial assistance to enable the factory to continue in production.
But it said a few of the company's suppliers had acted impulsively, including illegally dismissing the workers and impeding the normal running of the factory. The financial losses that ensued had caused the temporary closure of the production lines.
"The administrators are in close contact with the local authorities to work for a speedy resolution of the situation and a return to stability," the company said.
In related unrest, workers at a Shenzhen factory owned by bankrupt Hong Kong-invested electronics supplier Gangsheng Electronics staged a protest in a shop near their factory.
The dispute was eventually arbitrated by labor affairs officials at the Longgang township government, who offered the workers three months' back pay.
A workers' representative surnamed Wang said around 900 workers had now received back pay from August to October from the government Thursday.
"We received 3.1 million yuan (U.S. $453,00) altogether," Wang said. "The factory will be stripped on Thursday, and then closed down."
"We will have one day to get out of the dormitories. Then we will wait for the government to administer things from there. Only then will we receive our severance benefits," she added.
Several Hong Kong-funded and listed companies have gone into liquidation in recent weeks. They include Gangsheng, Peace Mark Holdings, and household appliance maker BEP International Holdings.
Local officials are concerned about social unrest resulting from the closures, which are expected to continue amid an economic downturn in Europe and the United States, and about soaring costs of fuel and raw materials.
The delta region, traditionally an economic powerhouse teeming with labor-intensive industries, may need to readjust its business strategy in the new economic climate, analysts say.
Hong Kong-listed toymaker Sewco International Holdings Ltd. in Zhongshan also laid off about 6,000 workers, or about two-thirds of its total work force, in recent months, according to local media reports.
Guangzhou-based legal consultant Tang Jingling said that as the economic situation worsens, more companies may go bankrupt.
“The long-term solution is to protect workers’ rights, including both economic rights and political rights. Workers get laid off if companies go bankrupt, and social chaos will be the result,” he said.
Original reporting in Cantonese by Hai Nan and in Mandarin by Ding Xiao. Cantonese service director: Shiny Li. Mandarin service director: Jennifer Chou. Translated and written for the Web in English by Luisetta Mudie. Additional translation by Jia Yuan. Edited by Sarah Jackson-Han.