Official statistics show that thousands of factories in Guangdong province have gone bankrupt this year. In the latest flare-up of unrest, laid off toy factory workers protested in Dongguan on Nov. 25, flipping police cars and smashing company offices.
This has Beijing worried. It has decided to protect exports by increasing export tax rebates and halting the three-year-long appreciation of China's currency against the dollar. And local governments in the delta have used billions of dollars to bail out small and medium enterprises.
China's top economic planner, National Development and Reform Commission Director Zhang Ping, defended the bailouts at a recent press conference.
"Helping these companies get through their current difficulties is entirely necessary and appropriate," Zhang said. "Otherwise, if too many factories go bankrupt, it will lead to many workers losing their jobs, and could increase social tensions and unrest."
A Beijing bailout
NPR has an interesting piece on recent Chinese efforts to rescue small coastal export businesses who are hurting in light of the American slowdown in demand this holiday season: