SHANGHAI, China—Hundreds of laid-off workers massed Friday in Shanghai outside a Singaporean supplier to major consumer electronics companies such as Motorola and HP—the latest in a wave of labour unrest in China as manufacturers struggle with higher costs and slowing exports.
Recent strikes at factories and other major employers are revealing the increased pressure on China’s manufacturers and workers amid weak demand in Europe and the U.S. on top of surging costs for labour and materials.
For the first time in three years, the country’s manufacturing contracted in November.
A nervous Beijing has begun reversing a two-year effort to cool the world’s second-biggest economy, seeking to counter slowdowns in factory production and property that are dragging growth lower and spurring unrest.
Some of the 300-400 workers at the factory of Hi-P Int. in the eastern industrial suburbs of Shanghai said it was their third day of protesting over mass layoffs due to the company’s decision to relocate some manufacturing.
Workers have also accused the factory of violating labour standards.
“Sometimes, they ask us to work 18 or 19 hours in a day. Sometimes the overtime is even longer than a normal 8-hour work day,” said Tao Yong, a worker in his mid-30s.
Reflecting the tougher times for manufacturers, Hi-P International’s net profit margin plunged 80 per cent from a year earlier in third quarter to 2.1 per cent from 11.6 per cent —mainly due to higher costs.
Net profit in the third-quarter fell 42 per cent to 6.5 million Singapore dollars ($5.1 million) from a year earlier, according to its latest financial report.
The company, founded in 1980 as a tooling factory, said its third-quarter revenue rose 34 per cent, but so did costs for materials and taxes.
According to its website, Hi-P International is a contract manufacturer for the wireless telecommunications, consumer electronics and computing and automotive industries, with two-dozen factories and about 18,000 employees.