Houses without electricity, factories forced to stop production and candlelit shops. It happens in Northeast China, where electricity shortages have increased for weeks. At least 17 provinces and regions have already announced cuts in energy production in the context of a crisis that is spreading more and more and that involves an area which accounts for approximately 66% of the gross domestic product of the Asian country . This serious situation is caused by scarce coal supplies and the tightening of emissions standards. In the Northeast, factories have stood still to avoid exceeding the limits on energy consumption imposed by the central government to promote efficiency.
Economists say manufacturers ran out of this year’s quota faster than expected as export demand rebounded following the coronavirus pandemic. The authorities, writes the Economic Information Daily, have taken measures to ensure energy production and avoid further cuts, even if the situation does not seem to be improving.
The blackouts also affected the operation of elevators in the tallest skyscrapers, traffic lights and even street lighting. The problems of the energy system, however, have forced many plants to cut production, and two large banks, in the last few hours, have revised China’s growth estimates downwards.
Behind the crisis that weighs on the markets together with the risks associated with the possible default of the real estate giant Evergrande, the second Chinese real estate developer, which is grappling with a very serious financial crisis and a burden of 305 billion dollars in debt, there are record prices. reached by coal. In addition, there is also the strengthening of measures to cut polluting emissions with a view to combating climate change.
The difficulties of the energy network are weighed down both by factors deriving from geopolitical disputes – such as the drastic reduction of coal imports from Australia – and by the increase in natural gas prices. Goldman Sachs cut China’s growth estimates for 2021 to 7.8% (from 8.2%) to 5.5% for 2022. China may soon take steps to try to cool down Coal prices soared and thus alleviate the energy shortage.