Power outages in China’s industrial sector have been reported in some major cities and provinces with the potential that global shoppers, including Nigerians, may face possible shortages of smartphones and other goods ahead of Yuletide celebrations.
The ugly development had negatively affected official energy use targets, thereby forcing Chinese factories to shut down while also leaving some households in the dark.
For instance, a news report by manufacturing.com, an online medium, quoted the state broadcaster CCTV as reporting that in the northeastern city of Liaoyang, 23 people got hospitalized with gas poisoning after ventilation in a metal casting factory was shut off following a power outage. However, no death was reported in the incident.
According to the news medium, factories were idle to avoid exceeding limits on energy use imposed by the government to promote efficiency as analysts estimated that manufacturers used up this year’s quota faster than planned as export demand rebounded from the coronavirus pandemic.
The medium also quoted a components supplier for Apple Inc.’s iPhones as confirming that it suspended production at a factory west of Shanghai under orders from local authorities.
Economic experts believe that the disruption to China’s manufacturing industries during one of the busiest production seasons reflects the ruling Communist Party’s struggle to balance economic growth with efforts to rein in pollution and emissions of climate-changing gases.
Commenting on the situation, Nomura economists Ting Lu, Lisheng Wang and Jing Wang, stated in a report on Monday that “Beijing’s unprecedented resolve in enforcing energy consumption limits could result in long-term benefits, but the short-term economic costs are substantial.”
The analysts said the impact might be so severe that they cut their economic growth forecast for China to 4.7% from 5.1% over a year earlier in the current quarter. They cut their outlook for annual growth to 7.7% from 8.2%.
Already, global financial markets are on edge about the possible collapse of one of China’s biggest real estate developers, Evergrande Group, which is struggling to avoid a default on billions of dollars of debt.
The news report further clarified: “Manufacturers already face shortages of processor chips, disruptions in shipping and other lingering effects of the global shutdown of travel and trade to fight the coronavirus pandemic.
“Residents of China’s northeast, where autumn temperatures are falling, report power cuts and appealed on social media for the government to restore supplies.
“The crunch comes as global leaders prepare to attend a U.N. environmental conference by video link on Oct. 12-13 in the southwestern city of Kunming. That increases pressure on President Xi Jinping’s government, as the meeting’s host, to show it is sticking to emissions and energy efficiency targets.
“China is one of the world’s biggest emitters of climate-changing industrial gases and consumes more energy per unit of economic output than developed countries”, it added.
According to news reports, several companies have announced power rationing could force them to delay filling orders and might hurt them financially.
For now, China’s energy consumption and industrial emissions have surged as manufacturers rush to fill foreign demand at a time when competitors elsewhere still are hampered by anti-coronavirus controls.
The news medium also quoted economists, Larry Hu and Xinyu Ji of Macquarie Group as saying in a report that “China’s economy is “more driven by exports than any time in the past decade but official energy use targets fail to take that into account.”
According to Li Shuo, a climate policy expert at Greenpeace in Beijing, some provinces used up most of their quotas for energy consumption in the first half of the year and are cutting back to stay under their limits,
The policy expert noted that utility companies were being squeezed by soaring coal and gas prices which discourage them from increasing output because the government limits their ability to pass on costs to customers.
Li said that prices hadrisen “past the range of what China’s electricity industry can bear,” Li said.
China has launched repeated campaigns to make its energy-hungry economy more efficient and clean up smog-choked cities.
The results of the campaigns are that although city skies are visibly clearer, but the abrupt way the campaigns are carried out disrupts supplies of power, coal and gas, leaving families shivering in unheated homes and forcing factories to shut down.
