By Zhan Lisheng (China Daily)
Updated: 2008-02-28 09:59

Many Taiwan- and Hong Kong-funded companies in the Pearl River Delta are facing their toughest times in the past two decades, Chen Yonghan, chairman of Shenzhen Processing Trade Enterprises Association, said recently.

Workers carry out quality control checks at the Jetta Co Ltd toy factory in Guangzhou in this file photo. Many Taiwan- and Hong Kong-funded companies in the Pearl River Delta are facing their toughest times in the past two decades.[China Daily]

"If nothing is done to reverse the situation, more than 10,000 labor-intensive firms with no more than 200 employees each in the delta region might either close down or move somewhere else," Chen was quoted as saying in a report by financial news portal www.cnfol.com yesterday.

Chen cited the rise of the minimum salary set by the local government, the State's enhanced requirements for environmental protection, a short supply of power and labor, the rise of raw materials, the appreciating yuan and the recent enforcement of the new labor contract law as some of the factors that have made it difficult for companies to continue operating.

According to a recent survey by the Federation of Hong Kong Industries, more than 37 percent of about 80,000 Hong Kong-funded firms in the Pearl River Delta region are planning to move all or part of their production facilities elsewhere.

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