The scale of the problem is well illustrated by the fact that public authorities have called on the country’s largest industrial regions to reduce their energy consumption. In some areas, home consumers have also been affected by the austerity of unexpected power outages, causing many to stop in elevators, for example. One of the central daily newspapers, Global Times According to the worst situation occurred earlier this week in the country’s three provinces, which are located in the northeastern tip of China, on the Korean border.
In Heilongjiang, Jilin and Liaoning, power outages have completely disrupted people’s daily lives, not to mention factory production. Canton Province in the south has also been paralyzed by regular power outages, particularly its vast industrial areas and its maritime centre.
In many large companies, the demand for energy has fallen to only two to three days a week.
SGCC, the Chinese state electricity supplier, which is otherwise the world’s largest electricity company, swears to heaven and earth to do everything in its power to restore a safe power supply as soon as possible.
And this year, this is no longer the first energy crisis to hit China. There were similar blackouts across the country in June, but this is much more extensive and ominous than it is now.
What led to this dangerous situation?
The As I mentioned the index About the fact that an incredible amount of rain falls in July in Hunan Province and, above all, its headquarters, Zhangchoura, which is otherwise one of the semiconductor and mobile manufacturing centers. The floods caused by the rains have caused damages of billions of yuan and also affected production units, which means that their temporary shutdown has exacerbated an already severe shortage of chips, which could, for example, make smartphones more expensive in the long run. And indirectly, it can lead to disruptions in global supply chains.
In August, life in Shanghai virtually came to a halt after people were found infected with the coronavirus and feared another explosion-like focal point would form. Therefore, the authorities preferred to stop the movement of water and air to and from the big city. The forced closure of the port has led to serious delays in the import and export of raw materials, parts and finished products. due to recent infections Other ports were also closed and these closures were resolved very slowly.
Another concern is that one of China’s major coal suppliers, Indonesia, has recently been hit by severe storms that have slowed imports sharply, meaning stagnant deliveries are causing coal shortages at power plants and leading to blackouts. At the same time, the world’s second largest economy plans to achieve peak carbon dioxide emissions by 2030 and then phase out fossil fuels from energy production by 2060 at a slowly declining rate. But China also wants to stick to the climate goals it has adopted. With only about a third of economic/industrial regions achieving emissions figures, authorities have tightened and enforced emissions limits very stringently. This, in turn, led to a decrease in production.
China’s growth rate will slow
After last year’s economic shutdowns and downturns, the Chinese economy has recovered rapidly, but recent data now points to a contraction and slowdown in the world’s second largest economy. Major analyst firms and investment banks are also adjusting their forecasts for this year’s Chinese GDP data. at recent days , Goldman Sachs It announced that it expects the Chinese economy to grow by “only” 7.8 percent this year due to lower production, instead of the 8.2 percent that was originally expected. The change was mainly affected by the plant shutdown due to power outages in recent weeks. According to their experts, up to 44 percent of China’s industrial production could be affected by the energy crisis.
Several other analysts, such as Japanese financial group Nomura or Morgan Stanley Investment Bank, have also revised their figures on China’s economic outlook downward or warned that epidemics on the Asian economy will lead to a slowdown in GDP growth. These include the problems of big tech companies as well as the discontinuation of bankrupt real estate giant Evergrande.
(Cover Image: Kevin Frayer/Getty Images)
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