China’s Power Problems Expose a Strategic Weakness

https://www.nytimes.com/2021/10/13/business/china-electricity-shortage.html

By Keith Bradsher

China announced on Wednesday a national rush to mine and burn more coal, as the country’s electricity shortage threatens to damage its image as a reliable manufacturing base.

 

BEIJING — A bread company can’t get all the power it needs for its bakeries. A chemicals supplier for some of the world’s biggest paint producers announced production cuts. A port city changed electricity rationing rules for manufacturers four times in a single day.

China’s electricity shortage is rippling across factories and industries, testing the nation’s status as the world’s capital for reliable manufacturing. The shortage prompted the authorities to announce on Wednesday a national rush to mine and burn more coal, despite their previous pledges to curb emissions that cause climate change.

Mines that were closed without authorization have been ordered to reopen. Coal mines and coal-fired power plants that were shut for repairs are also to be reopened. Tax incentives are being drafted for coal-fired power plants. Regulators have ordered Chinese banks to provide plenty of loans to the coal sector. Local governments have been warned to be more cautious about limits on energy use that had been imposed partly in response to climate change concerns.

“We will make every effort to increase coal production and supply,” said Zhao Chenxin, the secretary general of the National Development and Reform Commission, China’s top economic planning agency, at a news briefing on Wednesday in Beijing.

Depending on how much coal can be mined and burned soon, China’s electricity shortage could call into question whether Beijing can deliver in the coming months the strong economic growth that China’s people have come to expect.

The electricity crunch has also laid bare one of China’s strategic weaknesses: It is a voracious, and increasingly hungry, energy hog. China has also emerged as the world’s largest emitter of greenhouse gases by a wide margin, thanks mainly to its already heavy dependence on coal.

 

The world’s No. 2 economy relies on energy-intensive industries like steel, cement and chemicals to power growth. While many of its newer factories are more efficient than their counterparts in the United States, years of government price controls for electricity lulled other industries and most homeowners into putting off improvements.

With the arrival of the winter heating season, which will require China to dig up and burn still more coal, Beijing must confront whether to allow factories to continue running full tilt producing industrial materials for global supply chains.

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Post time: Oct-19-2021
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