Power Shortage Turned Energy Crisis In China

Jacob Matos ‘23

The power shortages that are currently occurring in China are greatly affecting their economy and a multitude of people. In the past, the country has struggled with balancing energy supplies with demand, but the ongoing pandemic has made circumstances worse. The demand for Chinese goods has surged and the factories that manufacture them need more power than they have now. Additionally, the electricity demand has risen, the price of coal has gone up, leading to strict limitations on coal usage. Many of these complications could continue for months, and being post-pandemic it will put an economic strain on the country that is still recovering. 

Many provinces of China are at risk of power outages, and it is concerning for homes and businesses. Major manufacturing companies have been told to reduce their energy consumption during high demand, or to limit the days they operate. Fertilizer production, steel-making, aluminum smelting, and cement manufacturing businesses are the industries that are affected the greatest. The National Bureau of Statistics acknowledged that this is the worst energy shortage in China since 2011. Economic output is being rationed as well as the country’s foriegn trade, which affects not only China, but people worldwide. Unfortunately, power rationing can possibly continue until the end of the year.

With complications there is always a resolution. For instance, China’s economic planner of the National Development and Reform Commission outlined measures that will resolve this energy crisis. Firstly, it will include working closely with generating firms to increase output, which ensures full supplies of coal and promotion of rationing electricity. Secondly, the China Electricity Council, which represents generating firms, stated that coal-powered companies were now “expanding their procurement channels at any cost” to guarantee heat and electricity supplies for the winter. Power rationing has many risks to the economic growth of China, but as of right now, it is the only current resolution that is keeping the energy crisis at bay for now, but it won’t last forever.