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Power shortage: Chinese factories forced to shut down

Financial Times

China’s runaway economic recovery has been so successful that it has caused power shortages across dozens of its manufacturing and industrial hubs in the south of the country.

Factories across cities such as Guangzhou, Foshan and Dongguan, known for producing global consumer and high-tech products, have been ordered to use less power and even close for between one to three days a week to mitigate the shortfall…

As other economies struggle to return to growth, record demand for power from factories and industry has outstripped supply in Guangdong province, where the cities are located. The problem has been exacerbated by high temperatures as well as low rainfall in Yunnan, which Guangdong partly relies on for hydropower.

Analysts said the central government’s carbon emissions targets had also made local governments reluctant to expand their reliance on coal-fired power, forcing officials to ration electricity instead.

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

Provinces across China are under pressure to reduce their energy intensity — carbon dioxide emissions per unit of GDP — as part of central government efforts to reach peak carbon emissions by 2030 and reach “carbon neutrality” by 2060.

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