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Toyota shuts plants as crisis bites

Tue Jan 6, 2009 1:42pm IST
 
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By Chang-Ran Kim and Chris Buckley

TOKYO/BEIJING (Reuters) - Toyota Motor Corp will shut all its factories in Japan for 11 days to combat a global slowdown that is not only hitting company profits but could, a report says, unleash a wave of social unrest in China.

The two factors show how the crisis, likened to the Great Depression of the 1930s in its scope and severity, has spread from the U.S. housing and banking sectors to threaten every part of the world economy.

China relies on strong growth to create jobs for its millions of migrant workers and graduates, but risks an upsurge in protests and riots in 2009 as rising unemployment stokes discontent, a state run magazine said on Tuesday.

The unusually stark report was in this week's Outlook (Liaowang) Magazine, issued by the official Xinhua news agency.

"Without doubt, now we're entering a peak period for mass incidents," a senior Xinhua reporter, Huang Huo, told the magazine, using the official euphemism for riots and protests.

"In 2009, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the Party and government."

Researchers at the country's central bank forecast China's economy will probably grow a healthy 8 percent this year, in contrast to many independent analysts who predict a much sharper slowdown.

MORE MEASURES Governments and central banks have been working overtime to try to limit the fallout of the global crisis, flooding the financial system with cash, cutting interest rates and increasing spending.  Continued...

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