Just when Chinese businesses thought they couldn’t face any more production challenges, an energy crisis strikes.
The power outage comes at a time when factories are already scrambling to meet demand for everything from clothing to toys for the year-end holiday shopping season, despite rising raw material costs, long delays at ports, and shipping container shortages.
Manufacturers are already warning that tight government measures to reduce electricity use may reduce output in economic powerhouses such as Jiangsu, Zhejiang, and Guangdong provinces, which account for over a third of the nation’s gross domestic product.
Goldman Sachs has become the latest bank to cut its economic growth forecast for China this year. Nomura: The hottest topic about China will very soon shift from Evergrande to Power Crunch.
One company’s boss said it will be harder to deliver orders for the holiday season because of production halts. Other analysts have also downgraded their economic growth forecasts or warned of lower growth due to the power cuts.
