China is experiencing its worst power shortage since the 1980s, a phenomenon that puts at risk the country's post-COVID-19 economic growth and supply chains by shutting down electricity in homes and industries alike, a media report said.
The power cuts also affect suppliers to global tech giants such as Apple and Tesla. In September, factory activity shrunk as much as 44 per cent, reaching the low point of February 2020, when the coronavirus pandemic hit the hardest, Portal Plus, a news website, reported.
Now global investment banks have also cut their forecasts for China's economic growth. They estimated the economy to contract from 8.2 per cent to 7.8 per cent.
Top state-owned energy companies have been ordered by the officials of the Chinese government to secure supplies for this winter at all costs, otherwise, they may face the consequences, said Portal Plus.
There are various businesses that are hardest hit by the outages including energy-intensive industries as steel-making, aluminum smelting, cement manufacturing and fertiliser production.
Companies in major manufacturing areas have been called by the government to reduce energy usage during periods of peak demand or limit the number of days that they operate.
China's development planner, the National Development and Reform Commission (NDRC), intends to solve the crisis by asking power-generating companies to increase output and promote the rationing of electricity.
In turn, the power companies, represented by China Electricity Council, stated that "coal-fired power companies were now 'expanding their procurement channels at any cost' in order to guarantee winter heat and electricity supplies". However, finding new sources of coal supply is easier said than done, because, among the suppliers, Russia is already focused on its customers in Europe, Indonesian output has been hit by heavy rains and nearby Mongolia is facing a shortage of road haulage capacity, according to Portal Plus.
( With inputs from ANI )
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