China War on Pollution

China War on Pollution & how it affects your production and costs ?

These days , Chinese Factories are experiencing unexpected delays in productions and even closing theirs door for a couple of weeks.The reason is because Beijing is sending inspectors to make sure factories are complying with state environment rules in fighting the country’s war on pollution.

 

INSPECTIONS CAMPAIGNS

The central government of China has sent an army of inspection teams into the financial hub of Shanghai and Guangdong to monitor and inspect air pollution in the regions, to make sure the environment stays clean and it’s safe for the people in the region. Most of the factories, especially in Zhejiang and Jiangsu areas, have temporarily closed for 7-20 days, causing delays in finishing orders in this already super rushed and busy season.

The factories are closing their businesses themselves in order to avoid complicated bureaucracy, leading to further testings and potential fines. This is the reason, why the most of the factories shut down last week, as they prefer to avoid costs and troubles with the government rather than risk to be fined.

I have heard that some suppliers now are reducing their productions capacity , some are hidden their polluted machines , some are closing for a couple days even weeks and some are sending their workers back home .

Tough Times for Chinese suppliers

Chinese suppliers have been facing many challenges for the last 2-3 months: First , with the increase of Raw Material prices , THEN this time because of the Inspection.

Some analysts are suggesting that this clampdown on pollution is also causing the rise of some raw material products due to the slowing down in production, which will put pressure on the supply side , and therefore prices have no way to go only UP. For example, the carton box this month , is facing a sever shortage that its prices have increased by 100% .

This situation is also affecting my client shipments, four of his containers for raincoat have not been shipped yet , since the supplier is not able to find the fabric.However, I cannot blame my suppliers because it is out of their control. For the PVC fabric we use, there is a serious shortage, because the government are shutting down most of the small factories.

Conclusion : Times are tough for some Chinese factories nowadays .The only hope is that the situation will go back to normal and the only wish is that the coming Chinese year of the Roaster will be less challenging and more prosper .