November 27th, 2008

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Scary Scary News

Thursday, November 27th, 2008

The China blogosphere brought us some disturbing news again today. This time it’s about Foxconn, aka the Hon Hai Precision Industry, based in Taiwan. The rumour has it that it’s planning to lay off 100,000.

You might remember Foxconn from the funny episode of the IphoneGirl that became world famous for a day. It might also ring familiar because this is the company that manufactures the new iPhones and iPods.

What you might not know is that Foxconn is:

    • The largest exporter in China, according to their website.
    • The biggest electronics manufacturer in the World.
    • Employing close to half a million people only in PRC.

Now, I don’t want to come across as a rumourmonger, but I think it is worth to have a closer look at this. Because if it is true the social and economic impact in China will be seriously felt this time.

First, what is the source of this info? Mostly a rumour among the workers in the Shenzen megafactory, reported by local press. To be noted also the Hong Kong stock market sharp fall of Hon Hai shares earlier in November (and those guys in HK know a lot about Shenzen).

Second, how likely is it to be true? Well, I guess we will know soon enough, but there is something in this rumour that sounds very real for anyone that has been following Chinese affairs.

It follows the typical pattern: Local press report, buzz on the internet, Xinhua press ignore and downplay.  It is very suspicious that English Xinhua hasn’t witten a single word about Foxconn (the biggest exporter!) since these good news they reported in July. This is scary, because it’s exactly what the Chinese PR geniuses do when they see trouble coming.

Like I said yesterday, fasten your seatbelts, it looks like we are going to live in interesting times.