China Hit by Wave of Power Rationing, Outages, And Factory Closures



China is facing ongoing power shortages in its industrial northeast triggering a wave of factory closures, with traffic lights, residential elevators, and mobile phone coverage also affected in some cities.

Power rationing is already in place in more than 10 provinces including the northeastern province of Jilin, amid soaring coal prices.

Jilin provincial governor Han Jun called for more channels to secure coal supplies from Russia, Mongolia, and Indonesia, while dispatching teams to secure supplies from China’s northern region of Inner Mongolia.

According to an estimate by Goldman Sachs, as much as 44 percent of China’s industrial activity has been hit by power shortages, leading analysts to cut their 2021 GDP growth forecast for China to 7.8 percent from an earlier estimate of 8.2 percent.

Some shops and hotels in the northeast were lit by candlelight, while homes went without power and malls shut early, amid growing concern that power shortages could also affect water supplies.

Video posted to the social media platform Weibo on Sept. 27 showed traffic queuing in darkness in one city, with captions that quoted Chinese leader Xi Jinping as calling for greater efforts to protect power supplies to ordinary people and keep the generators turning.

The worst-affected areas are mostly concentrated in smaller cities and rural areas, according to media reports.

“The reason for the power outage is that coal is more expensive this year, and in previous years it was imported into China from abroad,” Jilin resident Wang Fengxia said. “So they can’t afford it this year.”

“They are rationing electricity, and accidents will occur in factories, mines, and hospitals,” Wang said. “If they cut power just as people are having surgery in a hospital, they are just going to die.”

Political considerations

A Shanxi-based current affairs commentator surnamed Jiang said political considerations inform every decision made by the ruling Chinese Communist Party (CCP).

“Actually, this has been their practice for many years now,” Jiang said. “Political considerations trump everything in China these days.”

“There is no sense that they are trying to avoid business closures or unemployment.”

According to social media posts, water supplies were also cut off in some places, with others reporting that they hadn’t eaten for two days, or were trapped in an elevator, or had to climb the stairs to get home to their high-rise apartments.

One family was sent to hospital after gas poisoning when their extractor fans stopped working during an outage, while another hospital was unable to treat patients due to a blackout.

Power suppliers said coal-fired power companies are “expanding their procurement channels at any cost” in order to guarantee winter heat and electricity supplies.

But China needs to increase production and its supply of coal, and more medium- and long-term contracts are needed to be signed to raise power plant inventories ahead of winter, the China Electricity Council warned.

Power-curtailment orders

The State Development and Reform Commission recently named Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Xinjiang, Yunnan, Shaanxi, and  Jiangsu as regions that need to improve their energy management, while “power curtailment orders” have been issued across the northeast and in coastal regions, catching many factories off guard.

Factories making printed circuit boards in Suzhou and Kunshan in the eastern province of Jiangsu were suddenly notified of a total power outage for five days without prior warning, a Taiwanese business association told RFA.

“All manufacturers in Kunshan have been notified of power outages,” Kunshan Taiwanese Chamber of Commerce president Tsung Hsu-hui told RFA. “We were notified about a week ago, and it will last until the end of the month.”

“We will have to review the situation at the end of the month,” Tsung said, adding that production capacity will be cut by at least 20 percent for the month.

Hsu Cheng-wen of the Suzhou Taiwanese Chamber of Commerce said the entire Suzhou Industrial Park, the Greater Suzhou Industrial Zone, Suzhou New District, and Kunshan have all been affected.

“The power rationing in Suzhou and Kunshan has had no impact on people’s daily lives, and the retail industry isn’t affected,” Hsu told RFA. “The biggest impact should be felt by the highest-polluting industries, like cement and plastics manufacturers.”

“Most manufacturers have already applied for late delivery, which may incur fines … output will definitely decrease,” he said.

According to Chinese financial scholar He Jiangbing, China currently gets 74 percent of its power from thermal generation, 11 percent from hydropower, and five percent from nuclear, wind, and other sources.

Translated and edited by Luisetta Mudie.





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