Factory closures 'no crisis'

The overall economy of Dongguan in Guangdong province, one of the world's largest producers of smartphones, has not been affected by the closure of some foreign-invested businesses, a top local government official said.

"It's normal for factories to close if sluggish demand has affected their operations," said Mayor Yuan Baocheng.

Several large foreign-funded factories in the city, most of which were making smartphones and related accessories, have suspended operations recently. But even so, other kinds of facilities are being opened.

For example, last Thursday, Clariant Corp, a world leader in specialty chemicals, announced the opening of a facility in Dongguan that will make desiccant packets for pharmaceutical, food and other companies.

"Dongguan's overall manufacturing sector has not been affected, given that a large number of new projects have opened in the city," said Yuan.

Two facilities owned by Wintech Corp, the largest producer of liquid crystal displays in Taiwan by market value, closed at the end of last year, according to a Dongguan government announcement. It said the closure was the result of Wintech's internal structural adjustment.

Also, United States-based Microsoft Corp closed a factory in Dongguan early this year.

"The smartphone industry has developed rapidly in recent years, leading to fierce competition between domestic and overseas players. It is no surprise to see that some foreign brands had to close their business in China due to poor market performance," Yuan said. "The closure of these processing facilities does not mean our manufacturing sector is facing a crisis."

According to Yuan, Dongguan's annual output of smartphones is about 230 million, accounting for nearly 17.7 percent of the world's total.

Dongguan has attracted investment of more than 600 million yuan ($95.8 million) since 2012, including expansions by more than 170 existing projects.

"Dongguan is still a hot destination for domestic and overseas investment thanks to its improved business environment," Yuan said.