China crimps commerce for Beijing Games
Factories have been shut down, and foreign buyers restricted.
Wen An, China
To the $40 billion China is spending on Olympic preparations, add another few hundred million in lost business.Skip to next paragraph
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Hosting the Games is usually a boon for commerce, or at least not a bust.
But in and around Beijing, hundreds of plants have been closed either to reduce pollution or because they use chemicals that officials fear could be used to attack the Games. Thousands more have cut production because traffic restrictions have made logistics a nightmare. Recent visa restrictions are preventing foreign buyers from visiting suppliers in China during the season when Christmas orders are normally lodged.
“Business is feeling like a sacrificial lamb on the altar of the Olympics and the security people,” says one foreign businessman.
Normally, over 5,000 tons of steel a day thunder out of the giant mill that looms over surrounding fields in this town 70 milessouth of Beijing. Today it is silent. For three months Xingang Corp., which owns the plant, is out of the steel business.
A few miles down the road, the Tian Li steel pipe factory is still open, but at half speed and only because its 250 employees make tent frames needed in the Sichuan earthquake zone. Its competitors in the area are all shuttered.
Not that many are complaining publicly. Neither local nor foreign businessmen want to appear critical of an event on which the government has staked so much of its prestige.
“The boss loses money, that’s all,” says Wang Jin Bao, logistics manager of a factory making steel frame in the industrial town of Dongxiang near here that has been closed for three months for exceeding pollution standards. “We have to support the Olympics.”
“There is disruption, and maybe it’s excessive, but we defer to the government” on the need for security, says James Zimmerman, chairman of the American Chamber of Commerce in Beijing. “We have not received any complaints from our members about inappropriate shutdowns.”
The government has not said how many businesses it has ordered to close.
In the capital itself, a major steel mill and a petrochemical factory are the most notable closures, along with all construction sites. Businessmen in this district say more than 200 firms have been shuttered. In the port city of Tianjin, 50 miles east of Beijing, authorities say a cement plant and 39 other factories are shut.
The government website said Thursday that a further 200 plants in regions around the capital would be closed if pollution levels were too high by Games time.
In the industrial zone at Langfang, home to many foreign firms, the authorities gave 88 companies handling dangerous chemicals 10 days notice to close last month, though they later relented on nearly half their orders in the face of protests by foreign companies, according to executives familiar with the situation.
None of the businesses closed by decree are thought to have been offered any compensation, and out-of-work laborers are getting a subsistence wage at best.
“I would think that since the factory is contributing to the Olympic Games with an economic loss, the government should give us some compensation, but I have not heard anything about it,” says Cai Wenbao, interim manager at Xingang’s steel mill. The mill is using its downtime to install new antipollution technology.