Eight years ago, Pascal Lighting employed about 2,000 workers on a leafy campus in southern China. Today, the Taiwanese light manufacturer has winnowed its workforce to just 200 and leased most of its space to other companies: lamp workshops, a mobile phone maker, a logistics group, a liquor brand.
“It used to be as long as you had more orders, you could get everything you needed to expand your factory, and you could expand,” says Johnny Tsai, Pascal’s general manager.
No longer. The Chinese factory – an institution that was once so large, it was measured in football fields – is shrinking. Rising labor costs, higher real estate prices, less favorable government policies and smaller order volumes are forcing Chinese plants to downsize just to survive.