China Electricity Crisis Deepens the Clouds of Fear on the Global Economy

All industries have had to cut the working day, while some have had to stop their production for weeks. According to an estimate, industrial activities of China have been affected by 44 percent.

China is facing an unprecedented power crisis these days. The goal of systematically reducing carbon emissions in electricity generation and the increase in gas prices, including the reduction of liquefied natural gas (LNG), are mainly responsible for this. In view of the power crisis, the Beijing administration has started cutting electricity supply, due to which many industries have had to cut working days, while some have had to stop their production for weeks. According to an estimate, industrial activities of China have been affected by 44 percent. The reduction in production is feared to have an impact not only on China but on the entire world economy. Experts in China are fearing that the reduction in production could lead to a 15 percent increase in the prices of the products. This is the reason why the whole world is concerned about the economic aspects of China’s electricity crisis.

Rising coal prices and shortage of LNG deepened the crisis
Roughly 80 percent of the products made in China’s factories are supplied to other countries. In such a situation, experts are apprehensive that due to the impact of the power crisis, the supply of raw materials will also be affected. At the root of the power crisis is the steep rise in coal prices. Another reason is the closure of mining work due to accidents in coal mines. Bitter gourd is also the target of the Chinese government to reduce carbon emissions on the lines of Neem Chadha. At present, the government has been successful in reducing carbon emissions by 3.5 percent. The Beijing administration has made a policy to focus its economy on e-energy by 2030. To achieve this, the government has issued new rules regarding electricity consumption for Chinese companies and industrial manufacturers. Shortage of coal and rising prices have forced producers to look to liquefied natural gas. The lack of supply relative to the increasing demand for LNG has also had a profound effect on production.

many factories closed
The power crisis in China has been going on for the past several weeks. This has created a threat of negative impact on the world economy. In many cities, the situation is so bad that electricity is available only for an hour or two. This has led to the closure of factories there. According to the Hong Kong newspaper South China Morning Post, many valuable equipment has been damaged and is happening due to frequent power outages. The raw material was wasted due to the disruption of the manufacturing process. Sensitive supply system has been broken. Business opportunities are being lost due to cancellation of orders.

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China's Electricity Crisis Deepens the Clouds of Fear on the Global Economy - /10

Summary

All industries have had to cut the working day, while some have had to stop their production for weeks. According to an estimate, industrial activities of China have been affected by 44 percent.

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