Chinese factory fears

Normally shut down this time of year, factories in China open their doors to stranded workers. CNN's Eunice Yoon reports

Blizzards, icy weather and freezing temperatures, that pretty much sums up what China's had to deal with for more than a week now. It's left millions stranded and sent a big chill right through the economy.

Asia Business Editor Eunice Yoon has more details on that. Eunice, things do look like they are improving a bit at the moment, but you know, really it has been an atrocious situation for so many millions of people.

It really has. I mean for more than a week now, migrant workers have been huddled at train stations with little hope of catching a ride home. But it's not just the workers who have been left out in the cold.

The start of the Lunar New Year, generally a slow time for business in China. Most factories shut down as millions of workers head home for the holiday. But this year with China's worst winter in half a century, halting trains and traffic, manufacturers like Goldlok are getting ready for some workers to return earlier than expected.

"Some of them, you know, twenty percent almost start coming back to the factory because there's a lot of traffic jam on the station. And that's why we need to reopen the factory for them."

Heavy snowfall paralyzed sections of the country's rail system, leaving millions of people---many of them factory workers---stranded. Some services are resuming, still with the backlog of travelers, the government urged migrant workers to cash in their tickets and spend their only holiday for the year back at their factory dormitories.

"We need to have some people to especially to care their emotional needs. They leaving their hometown, you know, and work for a whole year and what their hope is going back home to visit their family, so if they can not go back because of the traffic, they would be very very upset."

It's a painful move for manufacturers, too. They have the added expense of reopening factories early at a time when the snowstorms have caused power shortages and are threatening to delay shipments. Analysts say it adds to growing concerns and costs for exporters.

"China's export sector has its own problem. The production cost went up quite a bit. And the new labor law certainly has all kinds of implications to the cost and exchange rate continue to appreciate."

Not a very auspicious start to 2008.

Some economists said that the severe weather is likely to affect exports for January and possibly into February.

And as far as the longer term forecast. Eunice, do you think that the effects of the snowstorm are going to be felt down the road?

"Well, not for exports, but definitely for food prices. We're already seeing a spike in a lot of the prices for staple vegetables, such as cabbages, some of them as high as 50% up. But going down the road a lot of economists say that the summer crops have likely been severely damaged, that's going to escalate inflation in China at a time when they really don't need er, higher prices up, but one thing that I thought was pretty interesting is that even further down the road for the autumn crops, some economists that I have been talking to say that those crops might benefit from the snowfall because there is more melted water or melted snow which turns, of course, into water, and right now there is a water shortage in China. So that's, of course, another possibility, er, positive possibility down the road."

Notes:

blizzard: A violent snowstorm with winds blowing at a minimum speed of 35 miles (56 kilometers) per hour and visibility of less than one-quarter mile (400 meters) for three hours