China power crisis hammers SMEs as firms upend production, workers ‘dozing off’
- Chinese media reported on Tuesday that at least 20 out of 31 provincial jurisdictions have rolled out electricity-rationing measures in recent weeks
- Small and medium-sized enterprises in China were already under pressure from high raw material costs and coronavirus lockdowns
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Life with no power: Why some major cities in China are having to ration electricity
China’s army of small and medium-sized manufacturers (SMEs) have been hit hard by the nationwide power crisis, with outputs slashed and sweltering working conditions taking their toll, while panic buying of raw materials and goods is becoming commonplace over fears prices are set to soar.
Candle factories are among those rushing to meet orders as demand soars, but most factories and manufacturers are facing slowing production, rising costs and lower profits as the crisis which has escalated over the past month worsens.
“Our output is down by at least a third, and we can only work from midnight to 8am. Workers are dozing off, and their efficiency is much lower than during the day,” said Wang Jie, a footwear manufacturer in Dongguan, Guangdong province.
“Many export orders in Dongguan will be affected, and we may have to delay shipping orders. We have to reject new orders, including those relocated from Vietnam.”
We SMEs have already suffered too much this year – soaring costs of raw materials and shipping fees, logistics disruptions and slower payments
Wang, though, said the power cuts would not affect the Christmas manufacturing season as most producers had prepared in advance because they were already dealing with shipping and logistics issues caused by coronavirus outbreaks and most had already exported goods.
