For Japanese companies operating in China right now, the top worry isn't a potential default of debt-laden property developer China Evergrande Group but the supply crunch that could be triggered by electricity shortages.
If industrial production becomes sluggish in China amid the power shortfall, Japanese firms will struggle to buy the components they need and have to trim planned output, probably eroding their profits.
"We don't care much about the Evergrande shock because it is unlikely to cause actual harm to our business. This is merely a matter for financial market participants," said Kota Watanabe, a worker at a major Japanese manufacturer in China.