There are seasonal slowdowns this time of year with the factories in China. I think that person is not real informed of the normal operating capacities.
Typically factories producing goods for export are very busy up until the beginning of October and then slow down quite a bit until the end of the year as 4th quarter promotional shipments are finished. Exceptions to this are factories working on spring seasonal goods like lawn and garden, patio furniture, clothing, and portable fans.
There is no doubt there is a slowdown in production in China. Export orders for the 1st quarter are likely being impacted by the global slowdown and inventory hangover from the 4th quarter. However, I think the situation looks worse at the surface because the marginal operators are taking the biggest hit. You could lose 20 or even 50 marginal factories and still not equal the output of the largest one in a particular industry.
Another thing to keep in mind is there is huge overcapacity throughout China. If marginal operators go out of business those remaining in business are typically well equipped to handle the additional business. The exceptions may be apparel and shoes.
I believe China's GDP will drop to around 4% next year according to their figures, which would be about 0-2% according to internationally recognized methods. However, the economy needs to grow at about 8% to absorb the newcomers to the workforce, so there will be some issues with this.
Unemployment will actually help things in offices, as the recent graduates were getting way too good a deal. Sometimes people would get raises 3-4 times a year and still chase another job that would pay more. The job market was that tight for graduates.
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