US boss detained in China for bid to shift business to India

Discussion in 'China' started by TrueSpirit, Jun 30, 2013.

  1. TrueSpirit

    TrueSpirit Senior Member Senior Member

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    BEIJING: Foreign businessmen in Beijing are asking if the Communist Party-backed trade unions are working on plans to frustrate any possible moves to shift industrial units out of China.

    They are shaken by the recent detention of an American businessman, who tried to shift his business to India.

    Charles Starnes, 42, co-owner of speciality medical supplies firm Coral Springs, was detained for six days in his factory in the Beijing suburb of Huairou. What concerns foreign businesses is that the government, which usually disapproves labour strikes, allowed the detention by workers to continue for six days.

    Some economists have suggested that foreign businesses might shift to neighbouring countries like India, Bangladesh, Vietnam and Cambodia, where labour, land and other costs are lower.

    The labour resistance in the medical supply plant suggests that this might prove to be difficult.

    Workers at the plant were enraged when they saw a group of Indian engineers visiting the plant for inspections ahead of the company's plans to shift its injection moulding division to Mumbai, sources said. Workers were also demanding higher wages and better compensation for the division's employees who stood to lose jobs.

    Local government officials and Communist Party cadre were involved in negotiations with the company's management. There was no major effort by officials to persuade workers to release Starnes from detention though it is an illegal activity, sources said.

    US boss detained in China for bid to shift business to India? - The Times of India
     
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  3. TrueSpirit

    TrueSpirit Senior Member Senior Member

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    Chinese workers detain US businessman for a week

    An American businessman detained for almost a week by employees at a medical supply factory in Beijing was released on Thursday, following negotiations and an agreement to compensate workers . The incident has highlighted the growth of social tensions stemming from the slowing of the Chinese economy, and a growing tide of foreign companies moving production to cheaper labour platforms in countries such as Bangladesh and Cambodia.

    According to media reports, around 80 workers at the factory on the outskirts of northern Beijing blockaded exits, preventing Charles Starnes, co-owner of Speciality Medical Supplies, from leaving on the night on June 21. According to its web site, the company, which is headquartered in Florida, produces alcohol prep pads, lancing devices, syringes, and pen needles.

    Starnes was confined to his office until he was released on June 27. His ability to communicate while detained was not hindered by the workers, and he dramatically gave interviews behind his barred windows to the journalists that flocked to the factory. He said he had not been physically harmed, and had been provided with a bed and three meals a day.

    Starnes arrived at the factory on June 18 to announce the lay-off of 30 workers and the closure of a section of the plant’s production that is to be outsourced to a factory in India.

    Starnes has claimed the sacked workers were given severance payments and offered jobs in another department. The employees, however, said that the layoffs were in preparation for the closure of the factory and that they were owed two months of wages.

    Police maintained a presence at the factory, while the state-run trade unions and government officials intervened in an attempt to foster negotiations. They feared the incident could ignite broader unrest.

    Starnes agreed to meet the pay demands of all workers on Thursday, although he continued to claim that he had no intention of shutting the factory. The agreement reportedly includes two months of pay for 97 workers, and compensation totalling almost $300,000. Upon release, Starnes said his company would rehire some of the workers involved in the dispute on new contracts, and resume production on Friday.

    An article that appeared on the Wenxuecity web site quoted a man surnamed Huang, who claimed to be the factory’s vice-president. He stated that production had virtually ceased at the plant, with equipment being packed away, and assets valued in preparation for the closure of the factory.

    Huang also noted that while Starnes had claimed the factory would be used for producing ethanol-based medical supplies, the plant is 35 times larger than required for such operations. The recent arrival of Indian engineers to evaluate the ethanol assembly line reportedly further inflamed fears among workers that the plant would be closed.

    Chinese workers remember the immediate aftermath of the global financial crisis in 2008, when thousands of factories were closed, many still owing pay to their employees. An investigation by Economic Information Daily found that 400 executives, many employed by foreign-owned companies, fled bankrupt factories in Zhejiang province alone in 2008, leaving unpaid workers with no recourse.

    The Chinese government and the American embassy have said little publicly about the incident at Speciality Medical Supplies, likely out of concern that it would fuel unrest among millions of Chinese workers about rising unemployment and the lowering of wages.

    According to USA Today, Chu Lixiang, one of the chief negotiators as head of the state-run union in Beijing’s Huairou district, where the factory is located, sought to reassure foreign investors. “Everything has been properly resolved,” Chu said. “I just want to tell foreign investors that Huairou has a very good investment environment and fully-fledged laws, they don’t have to be scared.” The unions are widely viewed by workers as the industrial police for the government and employers.

    The dispute at the Beijing factory is not an isolated incident. Social tensions are escalating as economic growth slows amid heightened financial instability, precipitated in part by moves by the US to end quantitative easing. The Chinese economy grew just 7.8 percent last year, below the 8 percent considered necessary to keep unemployment under control.

    While notoriously unreliable official statistics have registered little change in unemployment, there are indications that it is rising sharply. In April, only 28 percent of graduating university students found employment in Beijing, and 29 percent in Shanghai.

    Similar industrial disputes to the Speciality Medical Supplies incident have received less international media coverage. In January, striking staff at an electronics manufacturer in Shanghai reportedly locked 18 managers, including Japanese executives and Communist Party cadres, inside a room for two days. The strike took place in response to punitive new workplace regulations, including timed toilet breaks.

    More recently, escalating social tensions found tragic expression in a shooting spree at a chemical factory in Shanghai’s Baoshan district on June 19, in which six people died. A 62-year-old worker at the plant was arrested by police. He had allegedly beaten and killed a co-worker, with whom he had a “financial dispute”, before killing a taxi driver, and then a soldier at an army barracks. He allegedly returned to the Shanghai Guangyu Fine Chemical plant, shooting three others, including the factory’s boss. The company had suspended production in May due to mismanagement.


    Strikes are constantly erupting in China. On June 18, 600 workers in a plant making flexible printed circuits owned by US Amphenol Corporation in Guangzhou stopped work to protest against low wages and substandard foods. The same day, hundreds of riot police were sent to smash a protracted strike by workers since June 6 at the Qufu Heavy Machinery Factory, which was privatised in 2003. Workers complained the Communist Party officials-turned executives and shareholders have lined their pockets at the expense of the employees.

    Chinese workers detain US businessman for a week - World Socialist Web Site
     
  4. Blackwater

    Blackwater Veteran Member Veteran Member

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  5. nimo_cn

    nimo_cn Senior Member Senior Member

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    The American factory owner failed to pay the workers in due time and attempted to default the payment by moving to India.

    Let us hope he will have a good prosperous business in India and pay Indian workers timely.

    Sent from my HUAWEI T8951 using Tapatalk 2
     
  6. Decklander

    Decklander New Member

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    ladakh incursion is costing China dearly. wait for flight of not just US but also Japs biz from China to India.
     
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  7. Abhijeet Dey

    Abhijeet Dey Regular Member

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    After that island fiasco (diaoyu or senkaku) between China & Japan this kind of situation was bound to happen. Not only Americans, the Japanese will also shift their business from China to India.
     
  8. sesha_maruthi27

    sesha_maruthi27 Senior Member Senior Member

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    ha ha ha, they are tasting the bitter UNCLE SAM now.......:pound::pound::pound:
     
  9. roma

    roma NRI in Europe Senior Member

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    the whole ladakh and aksai chin episode and china territorial claims on the indian side is just plain GREED ! - their land mass is 3 times ours yet they want to be sooo small minded about all the tiny enclaves !

    and it's that same same quality theyre showing in other areas of life including business - after all they cant help being themselves

    this isnt about india at all ! ...... - this is all about ccp-prc and their own "head"

    .....and when businesses begin moving out of ccp's-prc with greater momentum ( to wherever it may be ) , we'll see them get much more frantic and desperate ! hah ! :toilet:
     
    Last edited: Jul 1, 2013
  10. drkrn

    drkrn Senior Member Senior Member

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    any comment on the kidnapping?? as illegal detention = kidnapping.or is this a legal detention??
     
  11. drkrn

    drkrn Senior Member Senior Member

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    japs are sure to move out of china,cant be sure if its to india.hope for the best
     
  12. nimo_cn

    nimo_cn Senior Member Senior Member

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    kidnapping? no one is kidnapping him, the workers stopped him from leaving before he made the payment.

    why did he refuse to pay in the first place? is that the right way to do business? any comment?

    Sent from my HUAWEI T8951 using Tapatalk 2
     
  13. bose

    bose Senior Member Senior Member

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    Can you provide a nutral link [not the chinese propaganda one's] to prove that the US business man was running away without paying workers dues ?
     
  14. nimo_cn

    nimo_cn Senior Member Senior Member

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    can you provide a neutral link [not western propaganda] to prove that the workers detained him for no good reason?

    Sent from my HUAWEI T8951 using Tapatalk 2
     
  15. aerokan

    aerokan Regular Member

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    These kind of things can happen in any country. But making assumptions is not a good sign.. nimo!!
     
  16. bose

    bose Senior Member Senior Member

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    Why should I ?? You are claiming his wrong doing... a link from Reuters will do...
     
  17. pmaitra

    pmaitra Moderator Moderator

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    Things are not very rosy within PRC. There are problems with labour, rampant corruption as usual in an authoritarian rule, and the economy is not doing well. The DBO area incursions and the recent Bhutan incursions are probably indications that things are getting very difficult inside and perhaps PRC is looking for a conflict to consolidate its regions and people.
     
  18. Ray

    Ray The Chairman Defence Professionals Moderator

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    NIce post.

    Commendable effort to cover up that China is losing charm as an investment destination.
     
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  19. Ray

    Ray The Chairman Defence Professionals Moderator

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    Not to forget the chaos in Xinjiang and rolling out the tanks and the Army.
     
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  20. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Holy Hell
    How about Indian news.

    I don't have money to pay you, Mallya to KFA staff - Hindustan Times

    Sometimes shit happens and businesses tank.

    Detaining the boss is a criminal move.
     
    Last edited: Jul 1, 2013
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  21. drkrn

    drkrn Senior Member Senior Member

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    so what do you call "civilians obstructing/stopped him from leaving " for 6 days??
    do you have a new legal name for it?
     

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