Chinese Economy In Turmoil

CBS

Transcript

it's not business as usual in donguan southern China a region once called the real Santa's Workshop because it was home to thousands of toy factories that's no longer the case 50% of our employees have been sent home explains toy maker leiu a sharp decline in US orders has bankrupted more than half the area's toy producers manufacturers are feeling the pinch all over China 6.7 million workers have lost their jobs and that's threatening an implicit deal between the government and the people China Watchers believe the Communist party has maintained its hold on Power by making its 1.3 billion citizens richer year after year with an extended recession all bets are off 20 million brand new workers flood China's job market every year Beijing admits economic growth must stay above 8% to absorb them or unemployment could overwhelm the country risking social unrest it's already begun in donguan some struggling Factory owners fled without paying their employees sparking Street riots China's leaders are throwing a $586 billion stimulus package at the problem they're clearly saying hey we want to make a statement we want to improve consumer confidence we want to keep our economy rolling but the effects from that plan won't kick in for at least 6 months too late for migrant workers leaving town There's No development here now explains this man factories across China usually close once a year to celebrate January's Chinese New Year this time many are expected to stay closed cutting off an economic Lifeline for millions of China's lowest paid workers Celia hon CBS News dongan Southern China

Whats In Store For Big Three?

CBS

Transcript

Professor always good to see you we should mention these are goals and not requirements heading in you think that as we approach March 31st there's three different ways we can go here what are they well they can accomplish the goals get a new labor agreement restructure the debt streamline their dealerships they can get ready for chapter 11 because the negotiations in those areas fail or President Obama can bring in some additional money as president he can sweeten the deal labor is a is a big deal for you labor costs and obviously President Bush is the one who extended this deal but President Obama president elect Obama is taking over is it really going to be all up to him in the end in the end you cannot solve this problem without solving the labor cost issue uh debt the streamlining the dealerships that's a one-off it's a it's a one-time cost the labor costs go into every car made today and into the future without a deal on that the companies simply aren't solvent president Obama is going to have to insist that the unions bring their cost into line with the Japanese companies making cars here in the United States today so a big choice for him um is it an issue of whether Americans really just want to buy or not American cars do they I think they do because they buy American trucks because they're technologically Superior when it comes to cars American cars are now every bit as competent as Japanese cars but Japanese cars because costs are lower tend to have more content a better ventilation system tires that last longer nicer Upholstery and nicer interior so the Americans pick the nicer car okay Peter macei from the University of Maryland Professor thank you so much you're welcome