Chinese Factories Delay New Orders as Costs Rise, Risking Global Supply Shortages

- Advertisement -

HONG KONG—Buffeted by rising costs, some Chinese manufacturers are refusing to accept new orders or are even considering shutting down operations temporarily—moves that could put more strain on global supply chains and cause more inflation.

Surging raw-material prices and a shortage of workers have pinched smaller Chinese manufacturers, including many that sell their products to the U.S. and other Western markets. While many have passed their higher costs on to overseas buyers, the pain is so severe at some manufacturers that they are finding it hard to raise prices enough to make up the difference. Others don’t want to risk losing business to competitors. Many are now looking for other solutions to avoid losing money.

Zhongshan Xiliwang Electrical Appliances Co., a kitchen ventilator producer based in southern China, told clients in mid-May that it would stop accepting new orders temporarily and urged customers to wait for two weeks before negotiating prices, given their volatility.

The company has been operating at a loss since April, in part because of a substantial increase in prices for metals, glasses and switches, it said in its notice to buyers.

Xing Jialiang, the owner of a glass factory in Zhongshan, says his company is also running out of good options. It has raised prices by about 5% so far this year, but that hasn’t been enough to keep up with a 10% increase in costs, he said. Costs were pushed higher in part because Chinese authorities shut down or limited production at some high-polluting plants, Mr. Xing said, including those in glass manufacturing, which is energy-intensive and emits large amounts of carbon dioxide. China has vowed to achieve carbon neutrality by 2060.

Latest news

Massive crowd prompts street closures as Montreal Canadiens look to eliminate Vegas Golden Knights

In Montreal, police closed streets near the Bell Centre, where a thick throng of fans gathered as the Canadiens face the Vegas Golden Knights...

B.C. athlete may have to choose between breastfeeding her baby and her Olympic dream

A B.C. mother who is a member of the Canadian women’s basketball team headed to the Olympics in Tokyo next month is facing a...
Related news

Massive crowd prompts street closures as Montreal Canadiens look to eliminate Vegas Golden Knights

In Montreal, police closed streets near the Bell Centre, where a thick throng of fans gathered as the Canadiens face the Vegas Golden Knights...

B.C. athlete may have to choose between breastfeeding her baby and her Olympic dream

A B.C. mother who is a member of the Canadian women’s basketball team headed to the Olympics in Tokyo next month is facing a...

LEAVE A REPLY

Please enter your comment!
Please enter your name here