Report Notes “Factory Fires” Rise in Taiwan and China

June 25, 2002

A report from the Associated Press highlights the significant rise in the number of fires that have struck factories on Taiwan and mainland China, many of which have been of suspicious origin.

The article discusses the connection between rapidly increasing labor rates on Taiwan, which have induced many local entrepreneurs to relocate their activities to the Chinese mainland, and the number of fires which have occurred. Local police suspect that a number of factory owners have deliberately set fire to their facilities in order to collect on their insurance to fund the relocation.

Fire insurance rates have soared along with the increase in claims. The report notes that between 1993 and 1996, the period of active relocation, insurance rates tripled, while over five thousand suspicious fires were reported.

The problem, however, isn’t limited to Taiwan. Many factory owners have had financial difficulties following their move to China, and this has apparently caused a rapid rise in the number of suspicious fires. There were around 150,000 factory fires in China in 1997, triple the number reported in 1990. In 1999 the number rose to 180,000 fires, 189,000 in 2000, and 216,000 last year.

According to Chinese authorities, the main causes of the fires are employees seeking revenge, disputes between business partners, and factory owner hoping to collect on their insurance.

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