This post is not only related to China industry but also related to every exporter and importer.

The power outage policy in China

Recently, believe some clients also received china’s supplier’s notice of “electricity curtailment policy” to reduce energy consumptions, which will delay the delivery time.

Some factories are unable to start work due to electricity shortage, and workers are on holiday…

In particular, the coastal areas imposed power cuts on factories.

The factories could only give a large number of workers a holiday, and the newly purchased production lines could not be used, which caused considerable losses to export companies.

According to incomplete statistics, 16 provinces across the country have introduced electricity cut measures.

Ningxia, which is more aggressive, directly forced high-energy-consuming companies to suspend production for one month.

The two major manufacturing provinces, Guangdong and Jiangsu, have also imposed power cuts on a considerable number of manufacturing companies and forced a reduction in production.

What’s the influence of the power outage policy?

1. The pricing power of raw materials is controlled by international capital, and the pricing increase has brought great profit to the capitals, now China is trying to get the pricing power of finished products.

2. After power outages and Forcing companies to reduce production, the demand for international raw materials has decreased. then the prices of raw materials will stabilize and consolidate.

After the production cut, the total export production capacity decreased, then the price of finished products will rise.

3. Anyway, only China controls the Covid-19 and is the first country to resume work and production on a large scale, and only China can meet the global huge demand.

4. In other words, after decreased production capability.

The cost of raw materials has dropped, the price of finished products has risen, energy consumption has been reduced, and higher finished products price, meanwhile, more and more China enterprises will try to upgrade their production lines, and decrease unit costs and energy consumption.

5. For overseas importers, the price of purchased products from China will increase and finally increased, because of limited supply capability, Inflation will finally be brought to the world.

6. Some guys describe this as gambling between the global major countries.

Is international capital unable to withstand our production cuts first, and bulk prices decrease?

Or China cannot withstand the tight supply caused by production cuts and further push-up bulk prices in the short term?

Is Some countries couldn’t hold back our production cuts and price hikes, and we stubbornly exported inflation?

Or China cannot hold the crisis of production reduction, and upstream inflation will be transmitted downstream, triggering domestic inflation?

Nobody knows…

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