A power crunch across China has rippled from factory floors to homes and even traffic lights in some places, leading economists to cut their growth forecasts for the world’s second-largest economy.
An increase in power shortages in China has stopped production at numerous factories including many supplying Apple and Tesla, while some shops in the northeast operated by candlelight and malls shut early as the economic toll of the squeeze mounted.
The shortages mirror tight energy supplies in Europe and elsewhere that have roiled commodity markets, as well. Part of the problem is that the economic rebound after Covid lockdowns has boosted demand, while lower investment by miners and drillers has constrained production. But the crisis in China is partially due to its own environmental agenda, as President Xi Jinping’s vision of de-carbonizing the economy discouraged the burning of coal, a cheap energy source that subsidized its economic growth for decades.
China is in the grip of a power crunch as a shortage of coal supplies, toughening emissions standards and strong demand from manufacturers and industry have pushed coal prices to record highs and triggered widespread curbs on usage.
On Monday, State Grid Corp pledged to ensure basic power supply and avoiding electricity cuts. Rationing has been implemented during peak hours in many parts of north-eastern China since last week.
