Jakarta, CNN Indonesia —
China experiencing a crisis electricity some time recently. It makes some factory forced to stop production. Some of the factories that have stopped production include suppliers to Apple and Tesla.
Reported Reuters, some shops in northeastern China also operate using candles. Not only that, the mall also closed early.
Electricity rationing has been implemented during rush hour in northeastern China since last week. City dwellers including Changchun said the cuts were happening faster and lasting longer.
State Grid Corp. pledged to ensure basic electricity supply and avoid blackouts.
China’s electricity crisis is caused by tight coal supplies and increasingly stringent emission standards. These rules have hurt industrial production in some regions and dragged down the country’s economic growth prospects.
The impact on homes and non-industrial users comes as nighttime temperatures drop to near freezing in China’s northernmost cities. The National Energy Administration (NEA) has notified coal and natural gas companies to ensure sufficient energy supplies to keep homes warm during winter.
Liaoning province said power generation had declined significantly since July, and the supply gap had widened to a severe level since last week. This condition extended the blackout from industrial companies to residential areas last week.
Huludao City told residents not to use high-energy-consuming electronics such as water heaters and microwave ovens during peak periods. Residents of Harbin city in Heilongjiang province told Reuters that many shopping malls closed earlier than usual at 4pm.
The pressure from China’s electricity crisis has jittery stock markets at a time when the world’s second-largest economy is already showing signs of slowing. China’s economy is grappling with curbs on the property and technology sectors as well as worries surrounding the future of cash-strapped Chinese real estate giant Evergrande.
Production Loss
Tight coal supplies and increasingly stringent emission standards have driven electricity shortages across China.
China has pledged to reduce energy intensity by about 3 percent by 2021 to meet its climate goals. Provincial authorities have also stepped up enforcement of emission curbs in recent months after only 10 of the land’s 30 regions managed to achieve their energy goals in the first half of this year.
Power outages have affected manufacturers in major industrial hubs on the east and south coasts for weeks. Several major suppliers of Apple and Tesla have halted production at several factories.
At least 15 Chinese companies have said in exchange filings that production has been disrupted by power restrictions. Meanwhile more than 30 Taiwan-listed companies with Chinese operations have stopped working to comply with power limits.
Morgan Stanley analysts said the steel, aluminum and cement industries were also hit hard by the production curbs, with about 7 percent of aluminum production capacity suspended and 29 percent of national cement production affected. They say paper and glass could be the next industries to face supply disruptions.
Manufacturers of chemicals, dyes, furniture and soy are also affected.
China’s Economic Growth Corrects
The impact of the power shortage has prompted some analysts to downgrade their 2021 growth outlook.
Nomura cut its third- and fourth-quarter GDP growth forecasts to 4.7 percent and 3.0 percent, respectively, from 5.1 percent and 4.4 percent previously, and its full-year forecast to 7.7 percent from 8.2 percent.
“The power supply crisis in the world’s second largest economy and largest producer will have an impact on global markets,” said Nomura analysts.
Morgan Stanley analysts said production cuts, if prolonged, could drop 1 percentage point of GDP growth in the fourth quarter.
Last week, China’s major coal producers met to try and address shortages and curb rising prices.
China, the world’s biggest energy consumer and source of climate-warming greenhouse gases, said it aims to bring its carbon emissions to a peak by 2030 and to zero by 2060.
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