Massive power crisis hampers China’s economic growth

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China, the world’s largest manufacturing country, is facing an electricity crisis, forcing factories to shut down operations, cutting power consumption and outright blackouts in some provinces.

Beijing: The Chinese economic chariot is facing a major hurdle Big Electricity shortage across China

Media reports said China, the world’s largest manufacturing country, is facing a power crisis, forcing factories to shut down operations, reducing power consumption and outright blackouts in some provinces.

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Millions of people are believed to be affected by one of the worst power crises in the country. The Hong Kong Post reported that 20 out of a total of 31 provinces are implementing energy-rationing, fixing the industry sector of the world’s second-largest economy.

Experts believe that the problem has emerged because of the expected rebound in power demand from Chinese factories following the slowdown due to COVID-19.

The immediate reason is that China is still heavily dependent on coal, which provides 70 percent of the country’s electricity generation, Foreign Policy magazine reported.

However, the foreign policy report said the reasons for the crisis can also be traced back to policy mistakes and poorly thought-out market interventions after the onset of the pandemic.

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Industrial production declined due to the energy crisis in China in September for the first time since China recovered from the COVID-19 lockdown.

In late September, the country’s manufacturing powerhouse Guangdong province said it would widen the “peak-to-valley” price gap and increase peak electricity prices for industrial users by 25 percent.

Chinese state media Global Times reported that this power shortage threatens to reduce industrial production in the coming months.

China South Grid said the hike in electricity prices is aimed at industrial users and will not apply to residential electricity use. It comes as the price change at the southern economic powerhouse was triggered by a power shortage in China.

China’s power grid operator denied the energy crisis and promised to upgrade the national power grid and guarantee normal electricity supply. As Radio Free Asia reports, cuts and restrictions have often been implemented with little warning and little explanation by local governments, sparking public outrage.

“China’s energy supply capacity is currently sufficient to meet demand,” State Grid Corp. said in comments reported by the Global Times.

“China has no energy crisis,” it said.

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Despite China’s denial, major international suppliers are bracing for the impact on businesses already facing delays due to shortages and global shipping delays.

According to media reports, this setback is also prompting experts to cut growth expectations for China.

Meanwhile, some sections of the Chinese media have also called for a balance between climate goals and allowing the power crisis to spiral out of control.

First published:October 10, 2021, 1:21 pm

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