Wal-Mart Stores Inc. Loses Offices in China
by July 8, 2002 12:00 am 55 views
A gang of Chinese men demolished the factory and offices of a U.S. metal-products company in China to make way for a luxury apartment complex, a senior executive with the company told The Wall Street Journal.
Beijing Taico Industrial Metal Products Co., a supplier to Wal-Mart Stores Inc. and Home Depot Inc., was forced to halt production after about 100 unidentified men carrying sledgehammers and shovels arrived in early June to dismantle buildings and worker dormitories, said Frank Tierney Ko, Taico’s director of operations. Ko said the factory, located on the outskirts of Beijing, can no longer meet orders from customers.
Beijing Taico Industrial inherited the grounds of a Chinese state-owned factory in 1998 and signed a 26-year lease that was approved by the local government, but those same officials later attempted to nullify the contract. Ko said authorities told him the company lacked proper permits for its buildings. After he rejected a compensation offer from local officials to move, the men arrived, cutting off electricity, water and dragging managers off the premises, Ko said. The local police didn’t respond to the company’s calls for help, he added.
The incident is part of a growing number of foreign property disputes in China. Initially welcomed for bringing capital and jobs, more and more foreign investors are now in the middle of time-consuming, costly and sometimes dangerous land battles, The Wall Street Journal reported on June 20. The clashes stem from skyrocketing property prices, as commercial and residential developments in major Chinese cities spread into the poorer countryside. Many local officials, who just a few years ago eagerly signed over property, today appear to be having second thoughts.
The disputes have also put to the test China’s half-formed legal system, which still has trouble sorting out conflicting claims of private property while dealing with unclear lines of government authority.
A gang of Chinese men demolished the factory and offices of a U.S. metal-products company in China to make way for a luxury apartment complex, a senior executive with the company told The Wall Street Journal.
Beijing Taico Industrial Metal Products Co., a supplier to Wal-Mart Stores Inc. and Home Depot Inc., was forced to halt production after about 100 unidentified men carrying sledgehammers and shovels arrived in early June to dismantle buildings and worker dormitories, said Frank Tierney Ko, Taico’s director of operations. Ko said the factory, located on the outskirts of Beijing, can no longer meet orders from customers.
Beijing Taico Industrial inherited the grounds of a Chinese state-owned factory in 1998 and signed a 26-year lease that was approved by the local government, but those same officials later attempted to nullify the contract. Ko said authorities told him the company lacked proper permits for its buildings. After he rejected a compensation offer from local officials to move, the men arrived, cutting off electricity, water and dragging managers off the premises, Ko said. The local police didn’t respond to the company’s calls for help, he added.
The incident is part of a growing number of foreign property disputes in China. Initially welcomed for bringing capital and jobs, more and more foreign investors are now in the middle of time-consuming, costly and sometimes dangerous land battles, The Wall Street Journal reported on June 20. The clashes stem from skyrocketing property prices, as commercial and residential developments in major Chinese cities spread into the poorer countryside. Many local officials, who just a few years ago eagerly signed over property, today appear to be having second thoughts.
The disputes have also put to the test China’s half-formed legal system, which still has trouble sorting out conflicting claims of private property while dealing with unclear lines of government authority.