Power shortage in China may rock global economy, warn analysts and media

Beijing: – Analysts and the media are warning that the ongoing power shortage in China will have a major impact on the global economy. More than 20 provinces in China are facing severe power shortages, and supply to thousands of companies and factories has been reduced. As a result, the manufacturing sector has been hit hard, and there are fears that the international supply chain will be disrupted.

Coal accounts for more than 60% of Chinese electricity generation. Last year, China launched a trade war against Australia and imposed restrictions on coal imports from Australia. It was also alleged that coal ships from Australia to China were deliberately kept waiting. But it is China that has been hit hard due to this. China started importing coal from other countries. However, due to higher rates, power companies in China are facing difficulties.

Rising coal prices also pushed up the cost of power generation. But government regulations do not allow companies to raise prices. Due to the unavailability of power supply at low rates, some projects in the country decided to reduce and shut down coal-based power generation. Demand for electricity from factories and companies began to increase, while power generation declined. Electricity demand in China is at its highest level in decades, even at the domestic level. The power equation in China has deteriorated considerably due to declining power generation and increasing consumption.

According to a report released in October, power shortages have been reported in about 20 provinces of China. Hundreds of industries have been shut down in these provinces due to recurrent power outages. In some provinces, local administrations have sent power cut notices to factories. With demand and exports rising, power shortages have made it difficult for many companies to meet production targets on time.

The repercussions of the situation in China are beginning to reverberate internationally, with fears that the global economy could be rocked. Economists at Nomura Holdings have predicted that declining supplies from China will hit many sectors, including clothing, toys and machinery. Mike Beckham, a US analyst, warned that the problem of power shortages in China would have both negative and unexpected consequences. Beckham also claimed that the price of many of the products would rise by more than 15% in the United States if exports from China were affected.

The Chinese regime has launched a major crackdown on technology and real estate in the last few months. This could be a ‘double whammy’ for the Chinese economy as the power shortages intensify, said Bo Zhuang, an analyst in Singapore. The Chinese economy is likely to decline further, and it is inevitable, Zhuang warned. Chinese authorities have instructed steel and chemical companies to reduce production to reduce pollution levels. The Western media has pointed out that the manufacturing index in China is also declining.