One of China's largest plastic home décor manufacturers filed for bankruptcy last week, according to a provincial court. The company, Stars Arts and Craft Co. Ltd. of Xiamen, Fujian province, owes about 500 million yuan in debt but only has 200 million yuan worth of assets.

About 20 percent of the debt is to construction contractors, who built a luxurious, palace-like factory complex for the company. The 120,000-square-meter complex was put into use in July 2008, and Stars stopped paying factory workers in September. As the owner was confirmed to have fled to the United States, a local court took over the factory in October and shut down production.

Other creditors include suppliers, banks and private lenders. But the employees -- mostly migrant workers -- have so far been paid off by the local government.

It's undeniable that the global financial crisis hit Stars hard, but the irrational investment and unhealthy cash flow accelerated the company's collapse.