GF 323
CONFIDENTIAL
Visit to Huafa Electronics Corporation
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Annex V
The team visited Huafa Electronics Corporation, a Sino-Hong Kong joint venture (comprises of two Chinese enterprises and one Hong Kong enterprise, each had one - third of the total equity) producing colour televisions,
printed circuit boards and plastic parts. Over 85% of the production (300 000 TV sets out of 350 000) were for export and the major overseas markets were the United States, the United Kingdom and the FR Germany. In 1987,
sales amounted to Rmb 320 million, yielding a net profit
of Rmb 15 million. The net profit was expected to double
to Rmb 30 million in 1988.
When the company was set up in 1984, the amount of investment was US$2.1 million. It was claimed that within one year, the company managed to break-even.
Workers of Huafa on average earned a monthly wage of
Rmb 300 (i.e. basic salary of Rmb 140-150, plus bonus of
Rmb 100 and meal subsidy of Rmb 50), 25% higher than their
counterparts in state-owned enterprises. It was claimed
that the factory had the autonomy to hire and fire away
workers. Business propects for 1989 would not be as good
as 1988 (a record year) in view of China's contractionary economic policy.
Electricity supply is at present sufficient to support the
factory to operate only five days a week.
Thus the
industrial zones in the SSEZ have to take turn to stop
operations.
CONFIDENTIAL
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