China Feeling Impact Of U.S. Recession

Fall In Stirrup Sales In Calif. Triggers Falling Revenue, Rising Unemployment In Chinese Factory District

(CBS)  The link between Martin Cohen's 30-percent fall in sales of stirrups in California to falling revenue in China is forged at a factory in Qingdao.

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.

[CompletelyFrustrated]

Oh poor China....

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!

[gomurr]

Certainly I feel for the average working man in China....but I feel more for the unemployed American worker who has lost his job because his manufacturing job or customer service job has been out sourced overseas. On top of that, we are importing junk that has to be recalled from China because the "bosses" are getting rich and don't care if the product is substandard or dangerous......not the fault of the average worker who may lose his job as a result. They could care less....they have an unlimited supply of workers, anyway. If we are going to continue to import more than we export and outsource all our jobs because corporations don't want to pay people a living wage [God forbid their CEO's should take a pay cut or lose a multimillion$ bonus], what do people think is going to happen. What ever happened to made in the USA? This country is full of people who take pride in their work and skills.....let's utilize them....let's buy American.
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.

[EyeCeeUs]

Seems to me as thou we need a one world economy to add some stability to all the economies. Mr Obama seems like the right man to lead as Mr. Kissinger said.

[Illuminated1]

So when are the so called experts going to call this recession what it really is? A global depression!
I compared the charts of the depression era to today's, and I see the dip today is much deeper than that one was.

[John_Merritt]

I am so sorry the Chinese are feeling the pains of our recession. Somehow I think, WE ARE FEELING IT WORSE!

[sjc_1]

Just cause some rich folks in Southern California are not buying as many horse stirrups from China, I am not going to worry. When you depend on exports, you take what you can get. It is when we borrow a lot from China, they build their military and then tell us what to do, that is when I am concerned.

[QCG]

Qingdao, famous for Beer & the 2008 Olympic Sailing Regatta, has a very large population of Koreans that have opened numerous factories. During the past year global recession has taken its toll with factory closures and job layoffs.

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

[ibsteve2u]

"Factory workers earn about $225 a month"....

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.

[number1GI]

Breaks my &^%$@#@$%#**&^%#@ heart

[robbbieboy]

sky_five
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.