Saturday, December 20, 2008

Yuan Watch : Fleece then flee

Sat Dec 20, 2008 4:22am EST
SHANGHAI (Reuters)

China, hit by a slowdown in manufacturing from the global downturn, will pursue foreign investors who flee the country to escape failed business investments and debt, the Xinhua news agency said on Saturday.

China will ask foreign governments to help investigate and extradite the fugitives, especially in cases involving large sums of money, the official news agency said.

Government efforts to pursue runaway investors come at a time when shrinking global demand is dealing a heavy blow to export industries and manufacturers, forcing migrant workers to return to their rural homes after losing factory jobs.

Thousands of factories in the southern export hub of Guangdong have folded due to falling demand for China-made goods, rising production costs and the strong yuan currency.

China's commerce, foreign affairs, justice and public security ministries on Friday jointly issued a guideline for cross-border investigation and prosecution of fleeing investors.

More investors, especially from small- and labor-intensive industries, have avoided formal bankruptcy by leaving behind shutted factories, equipment and unpaid wages, Xinhua said.

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