China’s manufacturing is shrinking faster than China or the media will let on. This is combined with corporate solvency and government problems in the trillions that are causing the financial crisis.
We’ve reported on the solvency crisis of numerous companies involved in China real estate are facing of late. Evergrande was the first to be affected, but now many companies with large amounts of debt are facing solvency issues.
Three More Companies Join Evergrande – Unable to Meet Debt Obligations – Total Debt of Nearly Half a Trillion USD Facing Solvency Issues in China
Gateway Pundit also covered the financial problems that local governments are currently facing. Local governments across the country are rumored to have another $8 trillion in their books.
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A further surprise was that China has stopped providing electricity to manufacturers for a period of one week.
China is causing even more problems by imposing power cuts across the country that have negative effects on its GDP
There may be more. According to recent data from China, some manufacturing companies in areas like Dongguan near Shenzhen, and just across the border from Hong Kong are working 3 days per week, or less, according to information. This is the Pearl River Delta. There are 50 million people living in this city, which makes it one of the most populous places on Earth.
However, it could actually be worse. According to South China Morning Post
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.
Chinese media reports that producers have begun to stockpile inventory and are buying less-powerful equipment. Minimum 20 of 31 provinces have been rolled-out electricity-rationing measures in Recent There are weeks.Companies and families can become crippled.
While candle factories are one of the first to respond as high demand drives them, most manufacturers and factories face slowing production and rising costs, as well as lower profits, as this crisis has worsened in the last month.
“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…
…“Some factories are even being banned from producing [any goods] for six days after operating for Only one dayIt is true. It sounds so ridiculous, but it‘s true.”