Analysis-China factories cut shifts and workers’ pay as US tariffs bite

By David Kirton

GUANGZHOU, China (Reuters) -Mike Chai aims to cut wage costs at his kitchen cabinet factory by about 30% to remain competitive against other Chinese firms, which have stopped selling to the U.S. due to steep tariffs and are now coming after his long-time customers in Australia.

Chai had already halved his workforce to 100 people since the pandemic and says he has no more room to trim. Instead, he is shortening shifts and asking workers to take unpaid leave – an increasingly common practice that has become a hidden deflationary force in the world’s second-largest economy.

“We’re in survival mode,” said the 53-year-old, adding that his company, Cartia Global Manufacturing, in the southern city of Foshan, “barely breaks even.”

“I told them, you don’t want our factory to go