Yet another toy factory goes bust; Shenzhen government picks up the tab for lost wages

Hot on the heels of the widely-discussed closure of the Hong Kong-listed Dongguan-based toy manufacturer Smart Union comes the news that yet another toy factory — this time a much smaller one — has gone bankrupt. Once again, the local government has come to the rescue, picking up the tab for lost wages that the now jobless employees are demanding to prevent their anger from boiling over. Do we see a pattern for the future?

From AFP:

A TOY factory in southern China has gone bankrupt leaving 900 workers jobless, a report said on Wednesday, just days after a major toy maker went under as a result of the financial crisis.

Hong Kong-owned Chong Yik Toy Company, has shut down its factory in Shenzhen, in Guangdong province, the South China Morning Post reported, citing local officials who had paid the workers from emergency funds.

'The workers got payments ranging from a few hundred yuan to nearly 8,000,' Qiu Weiquan, a district labour official, told the Post, adding the local government had paid a total of 3.4 million yuan (S$744, 583) in compensation.

One worker told the paper that he was owed four months' salary.

'I have been so worried about that for a long time. I'm so lucky to have the payout,' he said, according to the Post.