After South Korea’s Samsung, Japan’s Olympus, and Ricoh, another Japanese multinational company is following suit and withdrawing from China. According to the Securities Times, a subsidiary of the official People’s Daily, Epson China confirmed that it will close its manufacturing company in Shenzhen in March 2021. The factories that Epson will close down belong to Epson Precision (Shenzhen) Ltd., a watch manufacturer, established in 2011.
Although Epson confirmed that the closure of the Shenzhen factory won’t take place until two years later, the layoffs have begun. One employee told Securities Times that the factory of Shenzhen in Baoan district has stopped recruiting and plans to lay off 1,700 people. The other Nanshan factory is still recruiting.
Radio Free Asia interviewed some Chinese netizens, who said that the retreat of large foreign-funded enterprises has something to do with the increase in operating costs. One interviewee said, “Overall, it has a lot to do with the increase in the cost of labor and land, as well as environmental costs. The corporate cost is still the major reason. As a result, some businesses have turned to Southeast Asian or Latin American countries.”
Another interviewee believes it is also due to the fact that the Chinese government attaches more importance to state-owned enterprises than to foreign and private enterprises. He believes that if China does not carry out structural reforms, the pace of withdrawal of foreign-funded enterprises will not stop.
Source: Radio Free Asia, March 22, 2019