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The lights turned off in China! - surely you have already heard about China's energy crisis in the media. We would like to bring you up to date.

surely you have already heard about China's energy crisis in the media. We would like to bring you up to date. 

China produces a large part of their required energy from fossil fuels. The shortage of coal caused by various events has led to power cuts by the Chinese government in almost all 23 provinces in the private and also industrial sectors.

This is the result of various events.

  • after the pandemic fast increasing demand from the rest of the world for (pre-) products from China

  • China's attempt to halve CO2 emissions by 2030 and be completely neutral by 2060.

  • trade conflict with China's largest coal supplier Australia.

  • heavy rains and flooding in China's two main coal mining areas. 

All of this is causing to an extremely price increase of Energy in China. In Addition the government's energy price cap makes it almost impossible for private energy companies to produce cost-covering energy.  Therefore, many power plants decide not to increase their energy production. 

But what does this have to do with Europe and the rest of the world?

Almost all Chinese factories, regardless of the industry, are "turned off" from electricity for several days. In some places, factories are running at only 50% of their capacity, resulting in production shortfalls and sharply rising production costs.

As a result, the prices of all products "Made in China" are rising. Currently, the highest price increase since 1996 is being recorded! Is there an end in sight? Not so far!

In addition, the global sea freight situation is still very tense. Demand for freight capacity and empty containers far exceeds supply, resulting in freight rates that remain extremely high. We do not expect this situation will improve before Chinease New Year 2022 (February 2022) either.

Since a large part of the decorative items, toys, souvenirs, etc. sold in Europe are produced in Asia, and the supply is faltering, a price increase of the products will almost certainly follow. If products will find their way into the store at all!

We will of course continue to keep you up to date!

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