Up to 2.5 million people could lose their jobs in the Pearl River delta, covering Hong Kong and parts of southern China, by January as a result of the global economic slowdown, a media report said yesterday.
The financial crisis could also bankrupt one-fourth of Hong Kong-owned small and medium-sized enterprises in the next three months, the South China Morning Post quoting the local business group, the Federation of Hong Kong Industries.
“The flow-on effects in Hong Kong will be drastic. It will hit the banks, the service industries, everyone,” federation chairman Clement Chen (陳鎮仁) said.
“We are very, very worried about our businesses. Our feeling for the medium term is grave and we believe the recession is going to last for some time,” Chen said.
Chen said banks were cutting overdrafts and other credit facilities which meant companies found it difficult to pay suppliers and staff as exports fell.
“We are appealing to the banks not to take the same line with everyone and to examine each business on an individual basis,” Chen said.
Several companies have recently said they would close down.
About 1,500 staff of Hong Kong-listed electrical appliance maker BEP International in Shenzhen will lose their jobs today when their factory closes.
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