Power outages, a new threat to China’s (and the world’s) economy
Growth forecasts drop below 8 per cent. Power shortages have been affected 16 out of 31 provinces and 44 per cent of industrial capacity. Outages are causing more workplace accidents. Residents in north-east China are left without heating. Local authorities cut supplies to meet emission reduction targets. Government media, however, praise the regime as a model for other nations.
Beijing (AsiaNews) – Power outages are the latest threat to the Chinese economy.
Many of the world's leading financial institutions have already cut the country's growth estimates because of this.
The latest is Goldman Sachs, which expects China’s GDP to grow by 7.8 per cent in 2021, down from its previous estimate of 8.2 per cent.
Morgan Stanley, Japan's Nomura, and China International Capital Corporation have already downgraded growth forecasts for China.
Goldman Sachs notes that recent power outages and output cuts have affected 44 per cent of the country’s industrial activity.
What is more, last Friday, 23 workers at a steel and casting plant in Liaoyang (Liaoning) ended up in hospital after inhaling carbon monoxide due to a sudden power outage.
The energy crisis has also impacted 16 of China’s 31 provinces. The latter are rationing electricity in order to meet the government’s annual carbon emission reduction targets.
Last year Chinese President Xi Jinping announced that China would eliminate carbon emissions by 2060.
Lower coal supplies and higher prices have also played a role. Coal remains China’s main source of energy.
Local authorities blame the problem on the increased consumption caused by economic development.
Citing inside sources, many Chinese media have reported that the situation will not improve in the coming months, putting the country’s power grid at risk of collapse.
Energy shortages have hit strategic facilities like the Port of Tianjin. Closing or slowing down activities at Chinese ports always has a strong influence on the rest of the world, given that China remains the world’s top manufacturing hub.
Individual households are also feeling the energy pinch, especially in the northeastern provinces of Jilin, Heilongjiang and Liaoning
Local residents are complaining on social media about the lack of heating, street and traffic lights not working, and lifts made unusable.
Following the COVID-19 pandemic, China’s economy set off on a rapid recovery, but since then growth has started to slow down.
According to analysts, this is due to the government's recent anti-trust policies, which have targeted local hi-tech giants, as well as new coronavirus outbreaks and summer floods.
Investors are also worried about the fate of Evergrande, a real estate giant that risks defaulting on its US$ 300 billion debt.
Despite energy problems more commonly found in developing countries than in a major industrial and technological power, the People's Daily has praised China as a model for success followed by many other countries.
In a long front-page editorial published yesterday, the Chinese Communist Party’s main paper, claims that China’s rise is "unstoppable" and the decline of the West "irreversible".
According to experts who spoke to the South China Morning Post, the commentary is a glimpse of a resolution to be presented in November at the 6th Plenum of the 19th Party Central Committee, which will outline the Chinese Communist Party’s greatest achievements in its century of life as well as lay down its future direction under Xi’s leadership.
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19/10/2021 18:02
