RFA reported that the Covid-19 epidemic had caused big difficulties for many private enterprises in China, forcing them to cut headcount, suspend operations, and even stop production.
A technology company in Dongguan City, Guangdong Province, decided to suspend production on July 31.
Hardware manufacturing company Dongguan Jieying decided to cease operations on August 31. The company’s announcement said that due to the epidemic, the company’s operations faced many difficulties, so it could not maintain personnel.
On July 29, Huizhou Wanzhisheng New Energy Technology Co., Ltd. issued a notice saying that because of the epidemic, the company’s orders fell sharply. The company announced to stop production for 5 days.
In addition, Shandong Guangfu Group, a privately held iron and steel joint venture, has stopped production completely since July 19.
Employees of a technology company in Anshan, Liaoning province, will take a long leave from July 14 to January 22, 2023. Another company also announced that from July 30, employees will stay at home until February 10 next year.
Beijing’s zero-Covid policy has contributed to a large number of foreign enterprises withdrawing capital from China to invest in other countries.
Commentator Cai Shenkun on Aug 11, said that Dongguan, Guangdong, during its peak time, was a gathering place for the world’s biggest companies. The closure of businesses in Dongguan has happened in recent years. Lately, this has become more common.
Kaishan Toys is one of the most prestigious toy manufacturers in Hong Kong. At its peak, at the Dongguan branch, the company had more than 2,000 employees. But in 2021, Kaishan Toys was facing a sharp drop in orders. After many times of downsizing production, Kaishan Toys now has only 100 employees in Dongguan.
Commentator Guan Min said that it had been three years since the outbreak of Covid-19, and the Chinese government has not provided private businesses with preferential policies and financial support. This constitutes a reason for businesses to close.
Guan added that the Chinese government prefers state-owned enterprises to private enterprises. And Covid-19 is a great opportunity for China’s regime to cause private enterprises to withdraw or merge into state-owned enterprises.
Guan predicts that within 20 years, only state-owned enterprises will remain in China.