![]() ![]() Xie Feng/VCG/Getty ImagesĪ huge backlog at China's ports could spoil your holiday shopping this year Some companies have even started renting expensive diesel generators to keep business going, he said.Īerial view of shipping containers sitting stacked at Shenzhen Yantian Port on Februin Shenzhen, Guangdong Province of China. He said as many as 80 of the chamber’s member companies might have been affected by the government’s orders to suspend operations for a few days a week, adding that domestic manufacturers have been forced to stagger production, too. “The companies are not happy about this,” said Klaus Zenkel, chair of the European Union Chamber of Commerce in South China. The company expects production volumes to decline by 20%, or as much as 10,000 tons of steel per month. Guangdong-based Chengde New Material, one of the country’s largest stainless steel producers, told clients late last month that it would shut operations for two days per week until power no longer needs to be rationed. Such businesses used nearly 70% of China’s electricity last year, according to the National Bureau of Statistics, and have been major drivers of the recovery in 2021. ![]() “The power rationing will inevitably hurt the economy,” said Yan Qin, lead carbon analyst for Refinitiv.Ī shortage of electricity could reduce output across virtually every sector of the economy, including key construction and manufacturing industries. The shortages could deliver a one-two punch that may knock China’s fragile recovery off course, while spelling further trouble for global supply chains that are already struggling to cope. That ambitious target for the world’s biggest coal consumer has led the country’s coal mines to produce less, resulting in higher prices, according to Yao Pei, chief strategist for Chinese brokerage firm Soochow Securities. ![]() But there’s a key difference: China is also grappling with how to meet President Xi Jinping’s push for a carbon neutral China by 2060. This time around, the post-pandemic commodities boom and severe weather are once again forcing coal power plants to curb output, while also hampering hydroelectricity. Power plants are reluctant to produce a lot of electricity when the coal they burn is expensive: Beijing controls the cost of power, so producers can’t simply raise their prices. It’s the worst energy shortage in China since 2011, when droughts and surging coal prices pushed 17 provinces or regions to curb electricity use. Andy Wong/APĬhina faces huge climate and tech challenges in its bid for global leadership 2 leader has set a healthy economic growth target and vowed to make this nation self-reliant in technology amid tension with Washington and Europe over trade and human rights. The power crunch even contributed to a slowdown in factory activity growth in China in June, the country’s National Bureau of Statistics acknowledged on Wednesday.Ĭhinese Premier Li Keqiang speaks during the opening session of China's National People's Congress (NPC) at the Great Hall of the People in Beijing, Friday, March 5, 2021. At least nine provinces have said they are dealing with similar issues, including Yunnan, Guangxi and the manufacturing hub of Zhejiang, forcing regional authorities to announce power curbs across an area of China the size of the United Kingdom, Germany, France and Japan combined. Some local authorities are warning that power rationing could last through the end of the year. ![]() The restrictions have forced companies across the province to shut down for a few days per week. Guangdong province - a manufacturing center responsible for $1.7 trillion, or more than 10%, of China’s annual economic output and a bigger share of its foreign trade - has been rationing power for over a month. Several Chinese provinces have said they are facing a power crunch in recent weeks, including some of the country’s most important engines for economic growth. It’s a problem that could last for months, straining the country’s economic recovery and weighing on global trade. China is in the middle of a huge power crunch as extreme weather, surging demand for energy and strict limits on coal usage deliver a triple blow to the nation’s electricity grid. ![]()
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