China's largest domestic compounder Guangzhou Kingfa Sci & Tech Co. Ltd. has announced plans to build a production and R&D base in Kunshan, Jiangsu province.

Kingfa will invest 638.8 million yuan ($94.3 million) in cash in the wholly owned subsidiary. Based on the amount of investment, some analysts speculate that the Kunshan base will have larger capacity than Shanghai Kingfa and even catch up with the headquarters plant in Guangzhou.

The move to build a large production base in Kunshan, about an hour from Shanghai, illustrates the significance of the regional market in Yangtze River delta and East China.

Kingfa commenced its first compounding in North China in March, with 100,000 metric tons of annual capacity at the Tianjin site.

Analysts estimate that Kingfa's 2010 output will reach 550,000 metric tons, more than 25 percent higher than the previous year.

While labor issues linger in its coastal manufacturing base in Southeast China, Foxconn Technology Group has quickly taken some of its iPhone production in its new inland factory in Zhengzhou, Henan province.

The Zhengzhou factory started production in a rented building early this week, merely a month after Foxconn registered the company with local authorities.

According to various Chinese media, Foxconn brought more than 500 workers from Shenzhen, in addition to hiring 300 local recruits. The 500 workers from Shenzhen are largely from Henan province and volunteered to work at the new site, a company spokesman said.

Construction of a permanent plant will begin on August 20 at a site near the temporary building. The permanent plant is scheduled to begin production within one year and will make about 200,000 iPhones per day.

Foxconn's strategy -- to move manufacturing to inland regions -- will reduce the existing 400,000 employees at its Shenzhen base to just 100,000.

Analysts say labor costs in Zhengzhou will be comparable to Shenzhen, as Foxconn offers average wages of 2,500 -3,000 yuan ($369-443) per month for qualified workers. However, Foxconn expects to benefit from preferential land costs and tax perks.

The jury is still out on the true causes of the Foxconn workers' suicide incidents, but some believe that workers could be suffering from working far from their families and hometowns. The new Zhengzhu plant may help reduce that emotional distress.

An Italian-invested firm in Zhejiang province claims that its "multi-functional biodegradable liquid film" can replace traditional agricultural films, which is a major cause of "white pollution" and soil degradation.

Zhejiang Bolong Ecological Technology Co. Ltd. is owned by shareholders of Bolong Ecotech Italia S.R.L Ltd. Zhejiang Bolong was founded earlier this year in Wenzhou with 50 million yuan ($7.4 million) of registered capital.

The company said its patented liquid film is made from weathered coal that is rich in humic acid. The material is "modified by activator to form [a] polymer... with the action of [a] crosslinker." It's then mixed with additives, silicon fertilizer, microelements, pesticide and herbicide.

When sprayed onto the soil, the product forms a thin protective film that retains heat and moisture. The film naturally degrades into humic acid in two to four months, becoming organic fertilizer, according to the company.

As the temperature tops 105 F in the Yangtze River delta, firms are seeing a temporary rise in wages as well as requests for longer lunch breaks and free summer drinks.

Employers find it especially difficult to recruit plastics injection press operators, construction workers and cooks, among other jobs, according to an official at the Andemen Migrant Worker Market in Nanjing quoted in the Yangtze Evening News.

Many factory buildings in the Yangtze River Delta are not air conditioned.

In order to solve a seasonal worker shortage, companies are offering wages that are 30-50 percent higher than normal.

The Jiangsu Province Job Center released latest data that indicate a 10 percent increase of the number of hiring companies, fewer job applicants and lower recruitment success rate.

Two Chinese plastic companies and their executives are facing trials in Beijing on accounts of alleged production and sale of substandard plastic insulation boards that contributed to a well-publicized blaze involving the state-owned China Central Television.

Beijing Tian Jiang Building Materials Co. Ltd. and Langfang Huaneng New Building Materials Co. Ltd. of Hebei province each supplied extruded polystyrene insulation boards that failed to meet China's B2-grade flame-resistance standards.

The contractor of the CCTV building failed to check the quality of the products. Moreover, after the Beijing Quality Supervision Bureau caught the poorly made boards by Beijing Tian Jiang, the contractor switched to Langfang Huaneng but kept the authorities in the dark.

"While aware of their lack of quality materials, production techniques and inspection methods, Beijing Tian Jiang and Langfang Huaneng manufactured insulation boards and supplied them along with products purchased from other companies, without proper quality control or inspection", prosecutors said in the filing.

An executive at the construction company is being sued for obstruction of justice as he tried to cover up the facts after the fire. Meantime, a city official who was responsible for the quality supervision of the CCTV building also faces charges for alleged neglect of duty.

The CCTV building used more than 1 million yuan worth of plastic insulation boards.

Related blog post: Plastic boards blamed for CCTV fire

Taiwanese-owned plastic supplier Kaedar Electronics Co. announced last week that an unnamed executive in Kunshan, Jiangsu province, had been suspended and investigated for alleged kickbacks to Apple Inc.

Kaedar makes plastic casings for electronic products and has been supplying packaging containers for iPod since 2005.

According to Kaedar's parent company Pegatron Corp., Kaedar paid kickbacks to a third party in order to gain business from Apple prior to its acquisition by Pegatron in late 2008.

It may be a moderate success in terms of economic scale; nevertheless, Bayer AG's recent victory in a Chinese court over a firm that blatantly infringed Bayer's trade name sends a positive message.

The Intermediate People's Court in Quzhou, Zhejiang province, reached a verdict earlier this month, charging Quzhou Baier Sunshine Building Materials Co. Ltd. trade name infringement and unfair competition.

Baier was ordered to change its company name, make a public apology in a newspaper and pay a 200,000 yuan (US$29,378 or 23,171 Euros) fine.

The Chinese characters for "Baier" look the same as Bayer's Chinese name.
Reports said the company was able to register the "Baier Sunshine" name because it was deemed a trade name as a whole. However, the company intentionally left out the "Sunshine" part in its product branding and marketing.

Since Baier's products - plastic boards - are in the same category as those made and marketed by Bayer MaterialScience's Chinese subsidiary Bayer (Beijing) Sheet Co. Ltd., the court concluded that Baier's misleading and deceptive conduct constitutes unfair competition.

It was reported that Baier had received administrative penalties from the local Industrial and Commercial Bureau, but those measures failed to deter the company.

Bayer filed the lawsuit in late 2009.