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As a severe electricity crisis shakes the industrial heartland of northeast China, senior officials face increasing pressure from alarmed citizens to increase coal imports to keep lights on, factories open and even the water supply.
With power shortages caused by scarcity of coal supplies crippling large sections of industry, the governor of Jilin Province, one of the hardest hit in the world’s No.2 economy, called for an increase in coal imports, while an association of power companies said the supply was underway. expanded “at all costs”.
News outlets and social media have published reports and articles claiming that the lack of electricity in the northeast has shut down traffic lights, residential elevators and 3G cellphone coverage, as well as triggering closures factories. A utility in Jilin even warned that power outages could disrupt the water supply at any time, before apologizing for setting off the alarm.
Cities like Shenyang and Dalian – which are home to more than 13 million people – have been affected, with disruptions at factories owned by suppliers to global companies like Apple and Tesla. Jilin is one of more than 10 provinces that have been forced to ration electricity as producers feel the heat of soaring coal prices that they cannot pass on to consumers.
Speaking to local power companies on Monday, Han Jun, the governor of Jilin province, with a population of nearly 25 million, said that “several channels” must be put in place to guarantee the coal supply, and that China should source more from Russia, Mongolia and Indonesia.
He said the province would also urgently send special teams to secure supply contracts to the neighboring region of Inner Mongolia, according to the province’s official social media account WeChat.
Goldman Sachs has estimated that up to 44% of China’s industrial activity has been affected by power shortages, which could lead to a one percentage point drop in annualized GDP growth in the third quarter and a drop of two percentage points from October to December.
He said in a note released on Tuesday that he was lowering his 2021 GDP growth forecast for China to 7.8%, from 8.2% previously.
The electricity crisis set in as a shortage of coal supplies, tougher greenhouse emission standards, and strong demand from manufacturers and industry pushed coal prices to new heights. records and triggered widespread restrictions on use.
Rationing has been implemented during peak hours in many parts of northeast China since last week, triggering state media reports of power disruptions in many cities. and arousing the concern of avid social media users nationwide.
Although policymakers have previously warned that China needs to build more coal-fired power plants to offset potential electricity shortages during the 2021-2025 period, the utilization rates of existing plants remain low, suggesting that they lack economic incentives to maximize production.
Associated Australian Press
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