"He owes me 1,000 yuan," Liu said as he surfed the web at an Internet cafe near the plant. The amount is equivalent to about 143 U.S. dollars.
Liu and his 60-plus former colleagues don't know where to turn to get most of the wages they're owed. After the boss fled, the workers from the Modern Artware Plant got together to demand their back pay. Finally, after the local labor authority got involved, the plant equipment was sold to pay off the debts. Liu got one-third of his overdue pay. The owner of the factory lost 200,000 yuan in rent.
According to the Korea Business Development Center in Qingdao (KBDC), these "fleeing" enterprises mostly produced textiles, leather goods and ceramics and other labor-intensive items.
The manager of the KBDC in Qingdao, Lee Byong Jik, said from 2000 to 2007, there were 206 ROK enterprises that left Qingdao through "abnormal procedures." The number is similar to that given by SDFTEC, which said that last year alone, investors at 80 enterprises from the ROK simply walked away.
Leaving little but debt, bad image
The fugitive factory managers mostly operated on the cheap, officials in the region said.
"These enterprises made few contributions to the development of the local community, except hiring some local labor," said Li. He noted that many of these ROK investors had just rented existing facilities that had near-obsolete equipment, meaning they put up little money of their own. When conditions worsened and the managers fled, the assets they abandoned couldn't offset their liabilities -- wages, loans and rent.
SDFTEC said among the 206 fugitive enterprises, 30 percent had produced ceramics and 15 percent and 13 percent had produced textiles and leather goods, respectively. Many were small, with investments of only US$300,000 to US$500,000, and 55 percent had fewer than 50 workers.
But they left behind plenty of debt and ill will. These 206 enterprises were behind on bank loans of 700 million yuan. These enterprises owed 160 million yuan of wages to about 26,000 workers, SDFTEC said.
"It has really undermined Korean investors'image," said Cho Hak Rae, president of Qingdao Cuckoo Electronics Co., Ltd., which is still operating. "They should go through legal procedures, instead of fleeing."
Overwhelmed by change
"The business environment has changed and [the fleeing investors] faced great challenges," said Kwang Jae Won, vice president of the Korea Trade Center (KTC) in Qingdao. The center is part of the Korea Trade-Investment Promotion Agency. Kwang noted that new Chinese labor and tax policies have had a large impact on these small enterprises.
