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Early holidays point to grim outlook for China's small factories

Published on Jan 16, 2014 6:09 AM

DONGGUAN/KUNSHAN, China (REUTERS) - Scores of factories in China's manufacturing heartlands have closed earlier than usual for the country's biggest annual holiday due to weak orders and rising costs, workers and owners say, suggesting a rocky outlook for a key sector of the economy.

While official trade data remains mildly positive, visits to five factory towns in coastal industrial hubs found that in some areas perhaps a third of manufacturers had already begun closing weeks before the Lunar New Year break in late January.

In some cases anaemic orders from key markets such as the United States and Europe were blamed.

Others were being forced to curtail production because of a labour shortage, a symptom of shifting demographics, that has afflicted manufacturers for several years and many say is getting worse.

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