New Round of China Pollution Crackdown, and Commodity Price Up

New Round of China Pollution Crackdown, and Commodity Price Up

China has implemented an unprecedented pollution crackdown in recent months as the country shuts down tens of thousands of factories. The effort is part of a national effort to address China's infamous pollution and has affected wide swaths of China's manufacturing sector.

In total, it is estimated that 40 percent of all China's factories have been shut down at some point in order to be inspected by environmental bureau officials. As a result of these inspections over 80,000 factories have been hit with fines and criminal offenses as a result of their emissions.

"It had a big impact on our business," says the boss of a bearing factory in Cixi. "We couldn't make the delivery date since we [were] shut down. It's not just our factory. All the factories out here had this issue."

This is happening across the whole country: Entire industrial regions of China are being temporarily shut down, and the unusual sight of blue skies is reappearing as environmental inspectors go about their work. After decades of doing little about the pollution that has plagued much of the country, China's government may be finally getting serious about enforcing its environmental laws. The government is sending inspectors to go into factories for surprise inspections. They're instituting daily fines, and sometimes — in the real severe cases — criminal enforcement. People are getting put in jail.

Recently, the 4th round of China Pollution Crackdown is to start mainly from northern China, like Hebei, Liaoning, Henan, Shandong & etc. In short term it is supposed to extend to Zhejiang & Jiangsu provinces. Plus steel plants have shut down nearly 50% production to ensure central heating during whole winter in northern China according to the requirement of China's Ministry of Environment. Industry experts are predicting new round of price up is coming in recent days:

1.     Steel price is going up again.

2.     Rising gas price leads to forging factories or other factories those using gas as fuel adding cost.

3.     Ten of thousands of surface-finishing factories are forced to shut down, like zinc plating plants, seriously impacts on market price & delivery accuracy.

4.     Following the market trends, the price of accessories & spare parts is supposed to be adjusted.

In Edison Chan’s words, who became a hot topic because of his speech in New York University, “Everything has to be good on an international level and only then will we be able to stand proudly and say ‘this is Chinese made’.” The pollution crackdown is not only a risk, but also an opportunity for people in this industry to recognize poor factories, to improve product quality, to gain bigger market shares, to become part of international level.