Beijing is having a massive power crisis as intense weather, boosting demand for power, and inflexible restrictions on coal usage provide a triple blow to the country’s electricity grid. The crisis could last for months, damaging the nation’s economic retrieval and weighing on its trade.
Many provinces of China have described that they are dealing with a power crisis in the previous weeks that also adds China’s most significant engines for economic progress.
A manufacturing hub of China, Guangdong province, which is responsible for around 1.7 trillion dollars or we can say more than ten percent of the country’s annual economic output and also a significant share of its foreign trade, has been dealing with power crisis for more than a month. Moreover, the limitations have urged firms in the province to close for a few days a week. Besides this, some of the local authorities are cautioning that energy limitations could be extended to the end of the year.
The crisis isn’t getting worse for just Guangdong, but several other Chinese provinces have explained that they are facing the same kind of crisis. Those provinces include Guangxi, Yunnan, and the manufacturing center of Zhejiang. Furthermore, regional authorities are forcing to release power curb statements across the region of China which is equal to the area of Japan, France, Germany, and the United Kingdom together.
Manufacturing plants are also greatly affected
On Wednesday, the National Bureau of Statistics of China recognized that the power crisis also led to a slowdown in manufacturing plants activity progress in China in June.
The current power crisis was founded to be the worst energy crisis in the country since 2011 when deficiencies and increasing coal prices pushed seventeen provinces or areas to restrict electricity usage. Energy plants are reluctant to give most of the power as the coal they burn is expensive, China handles the cost of power, so the producers cannot just increase their costs.
The severe weather and post-pandemic commodities are now pushing coal power plants to limit efficiency, even hindering hydroelectricity. But you will find a major difference: the country is dealing with a crisis that how to meet Xi Jinping’s (Chinese President) goal of carbon-neutral China by 2060.
According to Yao Pei (chief strategist for Chinese brokerage company Soochow Securities), the ambitious aim of President Xi Jinping for the world’s top coal consumer has made the nation’s coal mines produce less and resulting in higher costs.