China faces electricity crunch causing widespread power outages; homes, factories affected
According to Bloomberg Intelligence, at least 17 provinces and regions, accounting for 66 per cent of the country's GDP, have declared a power outage in recent months.
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FollowGoldman Sachs reduced its 2017 economic growth prediction for China on Tuesday, citing countrywide power outages that affected millions of homes and disrupted work at companies that supplied Apple and Tesla. According to Bloomberg Intelligence, at least 17 provinces and regions, accounting for 66 per cent of the country's GDP, have declared a power outage in recent months, with the majority of them directed at large industrial users. Coal accounts for about 60 per cent of the Chinese economy. Nonetheless, supply has been interrupted by the epidemic, placed under strain by aggressive emissions objectives, and squeezed by a reduction in coal imports as a result of a trade dispute with Australia.
Coal prices reached an all-time high earlier this month, prompting the government to impose restrictions on companies and households due to a supply shortage. Nonetheless, China's electricity demand topped pre-pandemic levels in the first half of the year. Goldman Sachs predicted 7.8 per cent growth this year, down from 8.2 per cent last year, citing power interruptions that prompted heavy industries to reduce output, resulting in "significant downside pressures." It is the second bank in as many days to lower its projection.
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According to Nomura analysts, a growing number of firms have been forced to close their doors due to either government regulations to achieve carbon targets or rising pricing and coal shortages. It reduced its annual GDP growth projection to 7.7 per cent. Unimicron Technology, an Apple supplier, stated in filings with the Taiwan stock market that facilities in two areas were instructed to halt operations from midday Sunday until Thursday. According to stock market filings, several other firms, including a Tesla components supplier, were instructed to cease production this week.
Footage in the local newspaper Beijing News showed automobiles driving in total darkness on the main highway in Shenyang, with no traffic signals or street lighting. Another person reported that malls were closing early and that a convenience shop was operating by candlelight.
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