Decoupling sex and industry in China's Sin City?(2)

"We still need 20 more skilled workers - if only the girls who used to work for us would come back," says a shoe factory boss surnamed Kang. The expansion of the city' s sex trade has long been intertwined with the fortunes of manufacturing.

Yet the implications of the crackdown reach far further.

"We had a terrible time in the hotel business last year. Government officials, business people and even ordinary tourists would rather detour to Shenzhen and Zhuhai than come here," complains Zhong Hanqiang, chief executive of Xin Duhui Hotel.

A hotel owner surnamed Hu had been waiting for guests in his lobby for a week, but the six-storey establishment has been unable to reach 30-percent occupancy since the crackdown.

Hu made this investment 10 years ago when the electronic manufacturing industry was rapidly developing.

"I made a wild guess that the hotel would flourish," says Hu.

Hu guessed right as the sex trade was on the rise at that time and huge investments were made in the hotel and entertainment business after the financial crisis in 2008.

But now some five-star hotels have become karaoke bars and many bars in the local pub street have become restaurants.

After the crackdown, the sex trade seemed to have been eradicated overnight, along with its estimated spending of 50 billion yuan, which had accounted for a seventh of the local GDP.

When the security forces launched the campaign against prostitution in February last year, many experts speculated that Dongguan' s economy would suffer.

But recent forecasts say the decline in GDP is about to reverse, with predictions of 7.6-percent rise this year.

Wan Zhuopei, Party leader of Dongguan' s Houjie County, rejects claims the crackdown is to blame for the fall in hotel business. The main reason, he argues, is the bleak economic environment.

Dongguan Mayor Yuan Baocheng, in his government report to the recent fifth session of Dongguan' s legislature, vowed to eradicate prostitution.

Many representatives attending the session said Dongguan would have to introduce advanced technologies to boost the efficiency of production and become more competitive.

Yuan says Dongguan needs to redirect private capital flows into industrial restructuring and upgrading. Hotel businesses could look at hospitals and nursing homes.

Houjie County is promoting the development of the hotel business through industrial tourism and exhibitions, said Wan.

"It may take a long time to see if these measures work for us. But it may take a longer time to fully eradicate the sex trade," says Hu, the hotel owner.