Unrest isn’t exactly reported with abandon in China given that the media is censored heavily but it’s starting to look like the domestic situation in China is deteriorating rather quickly. Today’s New York Times reports that China cut interest rates by more than a full percentage point overnight. Included in the article is this key info:
In the latest sign of the intermittent labor unrest in export-dependent southeastern China, one of Hong Kong’s best-known toy companies, the Kader Group, announced on Tuesday that workers had damaged computers on Monday at its factory in nearby Dongguan and taken a small amount of cash after their employment contracts expired and were not renewed.
The Guangzhou Daily newspaper reported on Tuesday that 500 workers laid off from a toy factory had rushed into its administrative offices on Monday night, smashing windows and breaking computers. Three men and two women were injured and five police vehicles were damaged before the protesters were dispersed, the newspaper said, publishing a photo that showed a police van that had been turned completely upside down and had its doors torn off.
In a possible hint that the incident might have been even larger, the newspaper said that another 2,000 people were “watching” the protest. All newspapers in China are subject to censorship, but Guangzhou newspapers have been more willing than most to test the limits of what they are allowed to report.
I wrote the previously that China is on a precipice not unlike what America faced in 1929 and that the Communist party relies on economic growth to stay in power. With America cutting back drastically on consumption, growth in China will also shrink unless they can find a way to increase domestic demand. If workers don’t have jobs, that demand won’t materialize. And if hundreds of thousands of Chinese workers don’t have jobs, the situation inside China is liable to get a great deal worse. I just don’t know how much we’ll hear about it.