I’ve always said that next-door Kunshan per capita has the prettiest women in China. It’s a simple fact that Kunshan as a boom town made rich by Taiwanese investment attracted to its KTV lounges, discos, bars, tea houses (of ill repute) and barbershops (yes, even a haircut could be made sublime) attracted the cream of Chinese xiao jie from around the country.

But now the party has come to an end and districts in Kunshan are scrambling to find a way to take care of former employees of Taiwanese bosses that have taken the money and run back to Taiwan. According to a Financial Times report:

“As factories in this manufacturing hub near Shanghai, hit by the sudden collapse of export orders in the past few months, fail by the dozen, the government of the district of Lujia is scrambling for financial aid to pay off thousands of laid-off workers. It has turned to the few flourishing businesses in town for help.”

This is a huge trauma for the local government, which built the village into a vibrant if not unique economic success story in China.

“For Kunshan, home to the largest cluster of Taiwanese-owned manufacturers in China, this is a drastic turn in its fortunes. The arrival of manufacturers from the island in the mid-1990s, which quickly built profitable export bases for everything from computer components to furniture, made the city the first in China with tax revenues exceeding Rmb1bn.”

But the same Taiwanese companies that would willfully spew industrial waste into Kunshan waterways and paid its workers a pittance to work long hours and to live in cramped dormitories are getting out while the getting is still good.

“In October the Taiwanese founder of Hei Mengniu, a forklift factory close to Thermos, closed its gates and disappeared, leaving several thousand employees behind, their wages unpaid.”

But Kunshan government has a way of detecting possible plans for Great Escapes by its investors, something I’ve not read before:

“A utility company has been ordered to report weekly on trends in electricity consumption by local corporate users to the government. ‘Once there are drop-offs in use, township officials will be on your doorstep investigating whether you are closing down,’ says Mr Lin.”

But Taiwanese investment in Suzhou is just as much a cause of the meltdown in Kunshan as Kunshan’s liberal policies toward its tenants.

“Dick Lai, a senior executive at Plotech, a neighbouring computer component company, says the recent collapse of an affiliate of Taiwan-based Vertex Precision Electronics in Suzhou, a city close to Kunshan, means a number of suppliers in Kunshan will be next.”

Sounds like it’s only going to get tougher to find a satisfying haircut in Kunshan.