HONG KONG, July 30 (Reuters) - Dongguan, a key manufacturing centre in southern China where factories have come under severe cost pressure, has denied that firms are going belly up or leaving in droves after reports of an exodus. On average, about 6 percent of manufacturers in Dongguan closed per year, and last year and this year so far were no different, the newspaper Southern Metropolis on Wednesday quoted the city's vice mayor Jiang Ling as saying.
Taiwan's China Times reported on Tuesday that 20 percent of the 8,000 Taiwanese businesses in Dongguan left last year, including 200-300 of Taiwan's 1,000 shoe producers in the city.
Taiwan firms, along with Hong Kong companies, have underpinned the explosion in manufacturing in the Pearl River Delta in the past two decades.
Regional manufacturing associations and anecdotal evidence suggest that a larger number of firms than average have been folding or leaving the Pearl River Delta in the past year or so as the costs of fuel, raw materials, labour and land rise and China allows the value of its currency to appreciate.
But Dongguan's Jiang Ling gave different statistics.
"Dongguang has not had the large number of firms leaving that has been rumoured," he was quoted as saying.
"This year in the first half, 450 enterprises ended operations, accounting for about 3 percent, which means that over the whole year it is at a reasonable level ... the effect on Dongguan as a whole is small."
He said that last year, of the city's 15,000 processing trade firms, some 960 had closed, representing about 6 percent.
The Chinese government has been pushing Dongguan and other manufacturing hubs to shift out of low-end, labour intensive, polluting manufacturing and aim to attract higher value-added industries.
In May, another Guangdong newspaper reported that Dongguan planned to shut 173 factories deemed to be major polluters this year and would ban new investments in coal-fired power, cement, leather and paper making.
(Reporting by John Ruwitch; Editing by Ken Wills)
Provided by Reuters
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