Under pressure from the global economic crisis, multinational companies operating in China are employing fewer people and cutting jobs, Chinese state media reported.
A survey by the state employment agency FESCO, which primarily targets foreign companies, found that nearly 70 percent of surveyed companies are cutting their hiring plans for this year, according to the China Daily newspaper. Twenty-seven percent have already begun laying off employees, the survey further revealed, which included 356 clients of the agency across various Chinese industrial sectors. More than 44 percent of human resources managers surveyed by KingField Management, based in the southern city of Guangzhou, stated that their companies have already started to cut jobs. A survey of 216 companies in the central Chinese industrial region in the Pearl River Delta, half of which are multinational companies, showed that a quarter plans to lay off employees this year.
This sharply contrasts with the trend of strong employment growth in recent years. Multinational companies are now reducing their costs abroad to cope with cash flow issues at home or are more cautious about further investment in China, China Daily reports. Foreign direct investment in China weakened to $7.54 billion in January, a decrease of 32.67 percent compared to the same month last year. In comparison, in January 2008, there was a recorded growth of 109.8 percent year-on-year. “Many of our clients can no longer sell their products as they used to, so they are not particularly inclined to invest further in the Chinese market,” said an unnamed official from a European engineering and construction company. “If they do not invest, then we – who are largely dependent on their projects – cannot afford such costs, and we have to cut them.” (H)
