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China’s successful economic recovery has been a huge success as it has caused dozens of electricity shortages in the country’s southern manufacturing and industrial areas.
Factories in cities like Guangzhou, Foshan and Dongguan are known for being a worldwide consumer and high-tech producer products, have been instructed to use less energy and should shut down one or three days a week to alleviate the deficiency.
Klaus Zenkel, president of the EU’s South China Chamber of Commerce, said about 100 companies in the organization have been affected and that more shortages are likely to have a detrimental effect on foreign investment in the region.
“After the post-pandemic economic recovery, companies are very busy and have a lot of demand… Now some have been asked to close three days a week. It’s unreasonable,” Zenkel said. “It’s an infrastructure issue that needs to be managed immediately.”
While other economies are struggling to return to growth, factories and industries have surpassed a record demand for power in Guangdong province, where cities are located. The problem has been exacerbated by high temperatures and low rainfall in Yunnan, as Guangdong relies heavily on hydroelectric power.
Analysts have said the central government’s carbon emissions targets the local government was reluctant to expand its confidence in power with coal by forcing officials to ration electricity instead.
“With China’s carbon plan. . . local governments are very nervous about the use of coal and thermal energy, ”said Shan Guok, a partner at Plenum China Research.
Lara Donge, an IHS Markit data provider, said limits on coal imports and domestic production was also a factor causing the shortages.
The factories are worried that they will not be able to comply with the orders on time, after China Southern Power Grid Company said on Saturday that 21 cities and regions across Guangdong would be included in the rationing or use restrictions. Companies will have to limit their energy supply or their electricity will be cut off.
Mike Wang, the director of the Dongguan electronics factory, said the workers were suffering from “severe sweating” in 36 sweats, unable to turn on the air conditioning and fans without violating the limits on electricity use.
“I’m really worried. I don’t know how to explain it to customers [that their orders would be late]”He told the Financial Times that the energy shortage has reduced the efficiency of his factory by 20 to 30 percent.
China has experienced the fastest economic recovery in the world since Covid-19, mainly driven by its industrial and manufacturing sectors. His economy grew 18.3 percent in the first quarter of 2021 compared to the same period last year, although the growth rate was driven by a low base in early 2020.
From January to April, the total electricity consumption of a Guangdong city group known as the “Greater Bay Area” rose nearly 30 percent a year, the electricity company said.
Provinces across China are under pressure to reduce energy intensity (carbon dioxide emissions per unit of GDP) the efforts of the central government To achieve the highest carbon emissions by 2030 and to achieve “carbon neutrality” by 2060.
Dong said there is a risk of further rationing when the province reached its peak in July or August.
Additional information Qianer Liu in Shenzhen and Emma Zhou in Beijing
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