[ad_1]
“We used to bake five rounds a day and then we can still cover our operating costs. Now we only open at 4pm. We bake just once a day and when the cakes are sold out, we go home. It has a great impact on us,” said Xu Jiangui, the only baker left at a cheesecake shop on the ground floor of a mall.
Two of his colleagues, he said, had already been laid off.
INDUSTRIAL PRODUCTION HIT
Meanwhile, industrial production was crimped by power cuts. Ironically, this happened in Sichuan, the very province where many energy intensive industries had located themselves in order to take advantage of the normally cheap and abundant hydroelectricity.
“Big, energy intensive industries like steel, glass, fertilisers are hit the worst. This will have a huge knock-on effect on the supply chain and the total production in China, and even for larger scale production chains in Asia,” said Wang Dan, the chief economist at Hang Seng bank.
Sichuan is also home to a fifth of China’s lithium production, a key raw material in solar panels and electric vehicle batteries.
The power cuts sent lithium prices in China soaring to record high since April and businesses say the lack of advance notice gave them little time for contingency plans.
“The risk of China losing some of its luster is great,” said Massimo Bagnasco, the vice president of the European Chamber in China, “because we have to consider this comes after the uncertainties that our business community experienced in terms of economic development, the COVID-19 situation, the travel restrictions and the worldwide geopolitical tensions.”
[ad_2]
