Ready for more bad news on Xmas? There are feed problems in China which means that many of our gifts and merchandise could experience disruption and delays in their production and delivery.
Most of the country’s 31 provinces have had to introduce some level of energy rationing in response to supply constraints, soaring prices and tighter environmental controls.The disruption of factories and utilities will affect the supply of everything from gadgets from the world’s biggest tech companies like Apple, to textiles, toys and even Christmas decorations.
In Kunshan, home to one of the largest iPhone assembly lines, we found workers idling by the roadside with operations suspended until after National Day, which begins on October 1. This should be one of their busiest times of the year. .In the northern city of Shenyang, there were intermittent power outages and they had to deploy generators and batteries to keep their businesses open.
In some towns there were traffic light failures and even the water supply was reportedly affected.
China faces triple pressure on its energy sector. This year, it has seen an increase in global demand as countries begin to recover from the pandemic. But as he resumed his role as the engine of the world, the president increased his commitments on climate change and the cost of coal and gas skyrocketed.
These factors have put a strain on a business network that is already suffering severe delays and disruptions from the virus.
The port of Ningbo, which handles more cargo than any other, had to close for several weeks after a single case of Covid was reported. She is now trying to make up for lost time and increase container capacity.
The country’s industrial sector is also trying to keep up with demand, but is adhering to more stringent provincial emission guidelines.Almost 60% of China’s energy comes from coal, but the government is trying to cut spending in line with climate change targets and ahead of COP26, when it knows all eyes will be on it as the world’s biggest polluter.
However, as it tries to switch to cleaner energy sources, climate change has affected its other major energy sources. Some of the country’s hydropower plants have underperformed due to this year’s drought, and wind farms in the north have suffered from a lack of wind.But the main driver this year has been a shortage of coal due to tightening national security restrictions, problems in the regional supply network and rising prices. It left some manufacturers unable to operate and operating at a loss.The State Grid Corporation is committed to ensuring that businesses and homes have sufficient supply to get through the winter. However, just as this pledge was making national headlines, more and more regions were announcing a rationing of power.
Something will have to give in if China is to keep its lights on and also meet its global economic and climate goals.