China’s power shortage hits homes and factories sparking global supply fears | porcelain

Growing power shortages in northeast China have left households without electricity and halted production at numerous factories, while some stores were operating by candlelight as the economic cost of the downturn mounted.

Residents in the Northeast, where fall temperatures are dropping, reported power outages and called on the government on social media to restore supplies.

The rationing has been in place during peak hours since last week, while city residents, including Changchun, said the cuts were coming earlier and lasting longer, state media reported.

China’s energy crisis, caused by tight coal supplies and tightening emissions standards, has affected production in industries in various regions and poses a risk to already strained global supply chains.

Manufacturers are facing existing processor chip shortages, shipping disruptions and other lingering effects of the global travel and trade shutdown to combat the coronavirus pandemic.

In the northeast, factories were idle to avoid exceeding the limits on energy use imposed by Beijing to promote efficiency. Economists and an environmental group say manufacturers used up this year’s quota faster than planned as export demand rebounded from the coronavirus pandemic.

In Liaoyang City, 23 people were hospitalized for gas poisoning after ventilation was closed at a metal smelting factory after a power outage, according to state broadcaster CCTV.

The suspension of production in some factories raised concerns about possible shortages of products before Christmas, including smartphones and devices.

Apple’s component supplier Eson Precision Engineering said on Sunday it will stop production at its factory in Kunshan, west of Shanghai, until Thursday “in accordance with the local government’s power restriction policy.”

Eson said the suspension should not have a “significant impact” on operations.

Apple did not immediately respond to a question from the Associated Press about the possible impact on iPhone supplies.

The impact on households and non-industrial users comes as nighttime temperatures approach freezing in China’s northernmost cities. The National Energy Administration has told coal and natural gas companies to ensure a sufficient power supply to keep homes warm during the winter.

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.

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. The Chinese economy is grappling with restrictions in the property and technology sectors and concerns about the future of the real estate giant China Evergrande, with liquidity problems.

Tighter emissions standards have partly driven energy shortages.

China has committed to reducing energy intensity by about 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.

The ruling party is also preparing for the Winter Olympics in Beijing and the nearby city of Shijiazhuang in February, a period when it will want clear blue skies.

The pinch of power has been affecting manufacturers in key industrial centers on the east and south coasts for weeks.

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 fallout from power shortages has prompted some analysts to downgrade their 2021 economic growth outlook for China, and also warned of a possible global supply shortage of textiles, toys and machine parts.

With Reuters and Associated Press

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