The next shock in the pipeline for China’s economy: energy crunch
Al Jazeera
As China cracks down on energy use, it could lead to a shortage of everything from textiles to electronic components.
China may be diving head first into a power supply shock that could hit Asia’s largest economy hard just as the Evergrande crisis sends shockwaves through its financial system.
The crackdown on power consumption is being driven by rising demand for electricity and surging coal and gas prices as well as strict targets from Beijing to cut emissions. It’s coming first to the country’s mammoth manufacturing industries: from aluminum smelters to textiles producers and soybean processing plants, factories are being ordered to curb activity or — in some instances — shut altogether.
Almost half of China’s regions missed energy consumption targets set by Beijing and are now under pressure to curb power use. Among the most affected are Jiangsu, Zhejiang and Guangdong — a trio of industrial powerhouses that account for nearly a third of China’s economy.
