Definitely an interesting time to be doing business in China (and Asia). About a year ago we let go of one of our salespeople (a foreigner - not local Chinese) as the downturn hit the furniture industry first so we felt it quite early on. He was simply too costly. He did find a new job fairly shortly after with a much larger, more established, better financed company which was a good thing. However, just the other day, he stopped by for a visit and informed me that almost a year to the day, they then laid him off as well for the same reasons. I was quite surprised - that company seemed to be very well established. Seems to be the story everywhere.
My point is it seems the bigger manufacturers are letting go off anyone non-essential staff or just going under (see link to Decoro below), the smallest companies are definately going under, and those in-between seem to be shifting phase either into other products/services or else focusing on other markets - mainly domestic China. The larger ones with fancy marketing and well written business plans seem to big and clumsy to change quickly. Its the medium sized ones who are making the switch.
The real question is has the ripple effect really hit China yet. The Chinese are legendary for saving and skimping on costs, but after so long, some of these guys are spread pretty thin, even if they are doing domestic sales. I think its possible some of them may go under just when the rest of the world starts to pick back up mainly dying from a slow starvation.
Either way, there is definately a big shake up in the design and manufacturing industry and it will be interesting to see what the landscape looks like after things settle back down.