I'm posting this as a marker. Because the clown posse's first knee-jerk impulse will be to squeal "BIDEN!!!".
HONG KONG—China is struggling with widespread power shortfalls, dealing a blow to the recovery of the second-largest economy and risking disruption to global supply chains and heightened inflationary pressure around the world.
The power crunch, on a scale unseen in more than a decade, highlights how some of Beijing’s changing policy priorities, including its effort to limit carbon emissions, can ripple through a global economy that has been reshaped by the pandemic.
“There’ll be a cascading effect,” said Mike Beckham, Oklahoma-based co-founder and CEO of Simple Modern, which makes products such as insulated water bottles and backpacks, “As we started to comprehend the ramifications of what’s happening, we realized that this is potentially bigger than anything we’ve seen in our business careers.”
Last week, one of Mr. Beckham’s main suppliers, based in Quzhou city in eastern China, was told by the local government that it could only operate four days a week, instead of the usual six. In addition, it must adhere to a power-usage cap, which cuts the capacity of the factory by about one-third as a result.
Mr. Beckham anticipates U.S. retail prices for many products could increase by as much as 15% next spring, as appetite from retailers stays strong.
The shortages reflect a combination of factors. Coal prices have surged because of a shortage of domestic coal supplies, made worse by import cuts from Australia and Mongolia. That has prompted power stations to reduce output to avoid losses because of official caps on their selling prices.
Meanwhile, from the top, Beijing is seeking to enforce energy-efficiency targets, leading to officially sanctioned reductions in energy usage by some industries.
At the same time, demand for electricity has soared since the end in April 2020 of China’s pandemic-induced shutdown, as factories increased production to meet rising consumer demand in the West.
The power crunch in China adds to a global energy squeeze that risks upsetting the post-pandemic recovery.
www.wsj.com
China’s Power Shortfalls Begin to Ripple Around the World
Electricity crunch adds to a global energy squeeze that risks upsetting the post-pandemic economic recovery
HONG KONG—China is struggling with widespread power shortfalls, dealing a blow to the recovery of the second-largest economy and risking disruption to global supply chains and heightened inflationary pressure around the world.
The power crunch, on a scale unseen in more than a decade, highlights how some of Beijing’s changing policy priorities, including its effort to limit carbon emissions, can ripple through a global economy that has been reshaped by the pandemic.
“There’ll be a cascading effect,” said Mike Beckham, Oklahoma-based co-founder and CEO of Simple Modern, which makes products such as insulated water bottles and backpacks, “As we started to comprehend the ramifications of what’s happening, we realized that this is potentially bigger than anything we’ve seen in our business careers.”
Last week, one of Mr. Beckham’s main suppliers, based in Quzhou city in eastern China, was told by the local government that it could only operate four days a week, instead of the usual six. In addition, it must adhere to a power-usage cap, which cuts the capacity of the factory by about one-third as a result.
Mr. Beckham anticipates U.S. retail prices for many products could increase by as much as 15% next spring, as appetite from retailers stays strong.
The shortages reflect a combination of factors. Coal prices have surged because of a shortage of domestic coal supplies, made worse by import cuts from Australia and Mongolia. That has prompted power stations to reduce output to avoid losses because of official caps on their selling prices.
Meanwhile, from the top, Beijing is seeking to enforce energy-efficiency targets, leading to officially sanctioned reductions in energy usage by some industries.
At the same time, demand for electricity has soared since the end in April 2020 of China’s pandemic-induced shutdown, as factories increased production to meet rising consumer demand in the West.
The power crunch in China adds to a global energy squeeze that risks upsetting the post-pandemic recovery.
China’s Power Shortfalls Begin to Ripple Around the World
Widespread power shortfalls have hurt the recovery of the world’s second-largest economy and add to a global energy squeeze that risks upsetting the post-pandemic recovery.
www.wsj.com
