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28 Sept 2021

China’s Power Shortage Threatens Worldwide Industrial Activity & Growth

China’s Power Shortage Threatens Worldwide Industrial Activity & Growth

The Index Today

Citizens in China’s northeastern industrial region are pressuring senior officials to increase coal imports to generate power. A severe power shortage in the area is threatening industrial activity and water supplies.

According to recent social media posts, power shortages have led to the shutdown of residential elevators, traffic lights and even 5G mobile phone coverage in the Jilin province. Electric utility companies in the area have warned residents of power shutdowns which could possibly affect water supplies as well.

Home to around 13 million people, the cities of Shenyang and Dalian have been affected as they have several factories where supply goods for major international corporations such as Apple and Tesla are manufactured. Cities as such have been left with no choice but to ration and conserve power supply.
Han Jun, the governor of Jilin province has asked the government to set up multiple channels of coal supplies from other countries such as Mongolia, Russia and Indonesia.

According to an estimate by Goldman Sachs, around 44% of China’s industrial activity has been negatively impacted by the ongoing power shortages. This has led to a 1 percentage point decline in the third quarter GDP growth.

The main power suppliers represented by The China Electricity Council have stated that major coal-power companies are now increasing their output to meet growing demands. On the other hand, China must also focus on guaranteeing safety and protecting the environment.