China’s economic boom has left manufacturing centers lacking momentum

China’s runaway economic recovery was so successful that it caused power shortages in dozens of manufacturing and industrial centers in the south of the country.

The factories in Guangzhou, Foshan, Dongguan and other cities are famous for producing global consumer goods and high technology product, Has been ordered to use less electricity, and even shut down one to three days a week to reduce power shortages.

Klaus Zenkel, president of the European Chamber of Commerce in South China, said that about 100 companies of the organization were affected, and further shortages could adversely affect foreign investment in the region.

“After the economic recovery after the pandemic, the company was very busy with a lot of orders… Now some people are required to close three days a week. This is very unreasonable,” Zenkel said. “This is an infrastructure issue that needs to be addressed immediately.”

As other economies struggle to resume growth, the record demand for electricity from factories and industries has surpassed the supply in Guangdong Province, where these cities are located. The high temperature and low rainfall in Yunnan have exacerbated this problem, and Guangdong is partially dependent on hydropower.

The analyst said, Central government’s carbon emission target It also made local governments reluctant to expand their reliance on coal-fired power generation, forcing officials to curtail electricity.

“With China’s carbon plan… local governments are very nervous about the use of coal and thermal power,” said Guo Dan, a partner at Plenum China Research.

Said Lara Dong of data provider IHS Markit Coal import restrictions Domestic production is also a factor in the shortage.

After China Southern Power Grid said on Saturday that 21 cities and regions in Guangdong will be included in rationing or restricted use, the factory worried that it would not be able to complete orders in time. Companies must restrict power supply, otherwise their power will be cut off.

Wang, the manager of an electronics factory in Dongguan, said that during the days of 36 degrees Celsius, employees were “sweating profusely” because they could not turn on air conditioners and fans without violating power restrictions.

“I’m really worried now. I don’t know how to explain [that their orders would be late],” he told the Financial Times. He said that the power shortage has reduced the efficiency of his factory by 20% to 30%.

China has experienced one of the fastest economic recovery in the world since Covid-19, mainly driven by its industrial and manufacturing sectors.Its economy has grown 18.3% in the first quarter of 2021 Compared with the same period last year, although the growth rate was boosted by the low base in early 2020.

The power company said that from January to April, the electricity consumption of a group of cities in Guangdong Province, which borders Hong Kong and Macau and is called the “Greater Bay Area,” increased by nearly 30% year-on-year.

Chinese provinces are under pressure to reduce energy intensity-carbon dioxide emissions per unit of GDP- The efforts of the central government It will reach its peak carbon emissions by 2030 and be “carbon neutral” by 2060.

Dong said that as the province approaches the expected peak demand in July or August, there is a risk of more rationing.

Additional coverage of Liu Qianer from Shenzhen and Emma Zhou from Beijing

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