BEIJING, Sept. 27 (Reuters) – Growing power shortages in China have halted production at numerous factories, including many that supply Apple and Tesla, while some candle-operated stores in the Northeast and shopping malls closed earlier as custom which increased the economic cost of the contraction.
Rationing has been in place during peak hours in many parts of northeast China since last week, and residents of cities like Changchun said cuts were coming earlier and lasting longer, state media reported.
On Monday, State Grid Corp pledged to guarantee basic power supply and avoid power outages. read more
China’s energy crisis, caused by tight coal supplies and tightening emissions standards, has affected production in industries in several regions and is affecting the country’s economic growth prospects, analysts said.
The impact on households and non-industrial users comes as nighttime temperatures approach freezing in China’s northernmost cities. The National Energy Administration (NEA) has told coal and natural gas companies to ensure a sufficient power supply to keep homes warm during the winter. read more
Liaoning Province said power generation had declined significantly since July and the supply gap widened to a “severe level” last week. It extended power outages from industrial companies to residential areas last week.
Huludao City told residents not to use energy-intensive electronics such as water heaters and microwave ovens during peak periods, and a resident of Harbin City in Heilongjiang Province told Reuters that many Shopping malls were closing earlier than usual at 4pm (0800 GMT).
The power squeeze is making Chinese stock markets nervous at a time when the world’s second-largest economy is already showing signs of slowing down. read more
The Chinese economy is grappling with restrictions in the property and technology sectors and concerns about the future of cash-strapped real estate giant China Evergrande. (3333.HK). read more
Tight coal supplies and tightening emissions standards have led to energy shortages in China.
China has committed to reducing energy intensity by around 3% in 2021 to meet its climate targets. Provincial authorities have also stepped up enforcement of emissions restrictions in recent months after only 10 of the continent’s 30 regions managed to achieve their energy targets in the first half of the year. read more
The energy pinch has been hitting manufacturers in key industrial centers on the east and south coasts for weeks. Several key Apple vendors (AAPL.O) and Tesla (TSLA.O) production stopped at some plants. read more
At least 15 Chinese companies have said in exchange documents that production has been disrupted by power restrictions, while more than 30 Taiwan-listed companies with operations in China had stopped working to meet energy limits.
The steel, aluminum and cement industries have also been hit hard by production restrictions, with around 7% of aluminum production capacity suspended and 29% of national cement production affected, analysts from Morgan Stanley in a note Monday. They said paper and glass could be the next industries to face supply disruptions.
Producers of chemicals, dyes, furniture and soy flour have also been affected.
The consequences of power shortages have led some analysts to downgrade their growth outlook for 2021.
Nomura cut its GDP growth projections for the third and fourth quarters to 4.7% and 3.0%, respectively, from 5.1% and 4.4% previously, and its full-year forecast to 7.7% from 8.2%. read more
“The impact of energy supply on the world’s second-largest economy and largest manufacturer will spread and impact global markets,” Nomura analysts said in a Sept. 24 note, warning that global supplies of textiles, toys and machine parts could be affected. .
Morgan Stanley analysts said the production cuts, if prolonged, could reduce GDP growth by 1 percentage point in the fourth quarter.
Last week, China’s top coal producers came together to try to resolve the shortage and curb price increases. read more
China, the world’s largest energy consumer and source of climate-warming greenhouse gases, has said it aims to push carbon emissions to peak by 2030 and to net zero by 2060.
Information from Shivani Singh, Min Zhang in Beijing, Additional information from Kanishka Singh in Bengaluru, Ben Blanchard in Taipei, Yiming Shen in Shanghai and the Beijing newsroom; Editing by Ana Nicolaci da Costa and Tony Munroe
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