QINGDAO, China, June 3, 2009
China Feeling Impact Of U.S. Recession
Fall In Stirrup Sales In Calif. Triggers Falling Revenue, Rising Unemployment In Chinese Factory District
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Qingdao's port makes for easy shipping to the U.S. - except these days there's less to ship. (CBS)
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Play CBS Video Video Fiscal Link From China To N.Y. CBS News? Barry Peterson reports from Qingdao, China, where he traces the financial family tree of connections from industrial workers in this region to business executives in New York.
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Video Owner Hyun Ku Kim started business 40 years ago in his native South Korea and moved production here in 1990 to use China's cheaper labor, reports CBS News correspondent Barry Petersen.
And Qingdao's port makes for easy shipping to the U.S. - except these days there's less to ship.
The numbers tell the story. In a good year they'll sell 20,000 stirrups. This year they will be lucky to sell 8,000. And there was one month this past spring when they got no orders at all.
Fewer orders means fewer workers; layoffs cut 500 workers down to 290.
Their empty chairs litter the factory.
"Before the recession, what was it like in here?" Petersen asked Kim.
"This room is fully occupied," Kim said, adding that the empty chairs were a sign of reduced orders.
Factory workers earn about $225 a month, which may not sound like much, but many come from farming villages where the average wage is about $100 a month.
That's why, when factories closed in southern China, workers protested trying to get their good jobs back. It didn't work.
China's unemployment rate went from 4 percent last year to 9.4 percent this year.
Back in Qingdao, a rise in unemployment means more empty seats at places like the Don Korea restaurant serving the factory district. Owner Joo Won Il, worried about his business, cut prices.
A bottle of Korean liquor went from $4.50 down to $2.98.
And they are also cutting corners across town where 1,900 workers at the Far East Gem and Jewelry factory manufacture what America wears. The problem is Americans don't want to spend as much as they used to.
That means making fewer expensive gold pieces (production is down by 280,000) but making more of cheaper silver jewelry (up half a million pieces this year).
Yet when business slumped, bosses at this factory cut costs, not jobs - trying to keep trained workers for when the recession ends and sales come back.
"Other companies have cut staff but not here," says one worker Li Liyan. "So I'm not worried."
But whether Li and her co-workers keep their jobs here at Far East Gem in Qingdao depends on orders booked at trade shows like one in Las Vegas this week.
It's an industry that has done anything but sparkle in the recession.
"This has been the most turbulent time that the jewelry industry has experienced," said Greg Altieri, an American sales executive for Far East Gem. "Many of our competitors have actually gone by the wayside."
If there is a diamond - or a cubic zirconium - in the rough here, it is the expectation that things will turn around.
And if so Chinese workers will feel secure in their future once beauty is back on America's shopping lists.
©MMIX, CBS Interactive Inc.. All Rights Reserved.
Michelle Obama tells how her role as the First Lady has changed her perspective.
Here's a news flash for ya! It is not so much the recession, it is the fact that recently China has produced toys for children with toxic lead levels, poisoned our pets and killed children in their own country with tainted baby formula.
Sorry, I do not buy things from China anymore!
Wal Mart was founded on this principal.....look at it now....do they have anything that is Not made in China.....hope Sam is rolling over in his grave. And if you think a "one world economy".....ie;"one world government"....the ultimate agenda....is the answer ....watch out. Just let the government keep taking away your free choice and see how happy you are.....slavery is not dead.
I compared the charts of the depression era to today's, and I see the dip today is much deeper than that one was.
With recent investment from Limitless, a unit of Dubai World and its subsidiary in Hong Kong, Qingdao is evolving into an international travel destination.
For more information on Qingdao:
http://www.ThatsQingdao.com
Can an American worker live on that? Support a family on that? Send children to college on that?
lollll....don't kid yourselves: When Bill Clinton and the Republicans thrust free trade down America's throat, they did it to break YOUR back.
And the hearts of your children.
Chinese like the violin .. what is it, like 30 million violin players in China ?
What they don't have as much passion for is prviding quality furniture, electronics, clothes, tools, pet food, medicine, building materials, etc.
"The report clearly shows: Globalization is Suicide for everyone everywhere when things go wrong. There is nowhere to turn for help. One boat for us all."
Please research the great depression. No globalization, bit the whole world got the shaft just the same.
Posted by ajjaxtheleast at 6:46 PM : Jun 3, 2009
My thoughts exactly.
www.selloutyourcountrytoanunknowforeigninvestor.com
It started out with 10 blown-up security contractors being
spread around some Afghan village and ends up with
20-thousand Chinese stirrups NOT being
spread around California??
What,,,We look like repub voters?
- by MarcusCrow June 3, 2009 8:05 PM EDT
- I am shocked by the story and how it is made out that we are hurting China's economy. I grew up in a steel town in Pittsburgh during the late 70's and early 80's. The goverment was not handing out billions to the steel industry to "save it". The slogan of those times was to "Buy American!". I grew up in the goverment cheese and butter lines and even if it cost alittle more you were to buy american. Made in the U.S.A was something to look for on everything you bought. There was even a problem with some Japan products from thier town called USA. We need to worry about our own people and the products made here in the U.S.A. If we need jewerly then make it here by us! I feel bad for the people in China but it sucks here too. Do a story about our people in our country! That was some good goverment cheese!
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