China faces mounting pressure to ramp up coal imports and ensure supplies to keep lights on, factories open and water flowing as a severe power crunch roils the northeastern industrial heartland.
With electricity shortages sparked by coal shortages crippling large sections of industry, the governor of Jilin province, one of the hardest hit in the world’s number two economy, called for a surge in coal imports, while a power company association said supply was being expanded “at any cost”.
News organisations and social media carried reports and posts saying the lack of power in the northeast had shut down traffic lights, residential elevators and 3G mobile phone coverage as well as triggering factory shutdowns.
A utility in Jilin even warned power shortages could disrupt water supplies at any time.
For the second straight day, the main state grid operator sought to reassure customers, saying it would work to guarantee coal supply and strictly control power use by high-energy consuming and polluting sectors, and ensure power supply to residents during the October holidays.
Cities such as Shenyang and Dalian — home to more than 13 million people — have been hit, with disruption at factories owned by suppliers to global companies like Apple and Tesla. Jilin is one of more than 10 provinces forced to ration power as generators feel the heat of soaring coal prices that they can’t pass on to consumers.
Speaking to power firms on Monday, Han Jun, the governor of Jilin province, home to nearly 25 million people, said “multiple channels” needed to be set up to guarantee coal supplies, and China should source more from Russia, Mongolia and Indonesia.
Han said the province would also urgently send teams to secure supply contracts in the neighbouring region of Inner Mongolia, according to Jilin’s official WeChat social media account.
Goldman Sachs estimated that as much as 44 per cent of China’s industrial activity has been hit by power shortages, potentially causing a one-percentage-point decline in annualised GDP growth in the third quarter, and a two-percentage-point drop from October to December. It said in a Tuesday note that it was cutting its 2021 GDP growth forecast for China to 7.8 per cent, from the previous 8.2 per cent. Reuters
