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Global companies closing factories in China Updated: 2015-02-25 03:20:09 KST

Japanese watch-maker Citizen recently shut down its factory in Guangzhou.
More than one-thousand employees are up in arms after being laid off, but the company says it's part of its restructuring plans.

Citizen isn't the only one.
U.S. software giant Microsoft has also shut down its Nokia factory in Guangzhou and plans to open a new factory in Vietnam.
And with it's Beijing factory also slated to close, some 9-thousand employees are expected to lose their jobs.
Industry watchers estimate that before the Chinese New Year, more than 100 large factories, including ones run by Sharp and Panasonic, were shuttered in the city of Dongguan -- one of the country's main manufacturing hubs.
So what has triggered the mass exodus?

"Many manufacturing companies entered China two decades ago because of cheap land and labor costs but that's not the case now. Also, the Chinese market did not expand as fast as companies had expected."

What's more is that countries in Southeast Asia, such as India and Vietnam, are stepping up efforts to lure foreign companies.
The U.S., Japan and Europe are also offering incentives, such as tax cuts and investment support, to encourage home-grown companies to come back.

The trend has raised concerns that China's manufacturing industry, once driven by cheap labor, may be heading for a crisis.
The official Purchasing Managers' Index stood at 49.8 in January, falling below 50 for the first time in more than two years,. signalling a contraction.
Kim Min-ji, Arirang News.
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