China has a power problem — and it’s getting worse. This is not about political power — it’s about electricity. And it has implications that go far beyond the country’s borders.
At least 10 Chinese provinces have suffered electricity shortages in recent days.
They include some of the country’s industrial centers — where power cuts have scaled back and even shut down factory production.
Use figures show demand for electricity is running at nearly twice the pace of a year ago — as global demand has picked up for products manufactured in China.
Energy supply remains tight — most of the country’s electricity still comes from burning coal — and coal prices have been on the rise.
Because of regulations capping electricity prices, that combination means that many power plants are losing money simply by operating.
Plus, many local governments are cutting energy use to meet central government targets for reduced greenhouse gas emissions.
All of this has drawn sudden attention from many global investment bankers.
Goldman Sachs, Morgan Stanley and Nomura are among those who in recent days have cut their economic growth forecasts for China.
And an autumnal chill is already creeping over northeastern China — overnight lows are already down to the thirties this week.
Al Jazeera quoted one resident on the social media platform Weibo complaining about shopping malls closing early and a local convenience store lit by candles — writing in frustration, “It’s like living in North Korea.”
