The Asian giant is facing the worst energy crisis aggravated by drought. Water levels in the Yangtze River have dropped, reducing the amount of electricity produced in hydroelectric power plants.
The temperature in cities around the Yangtze exceeded 40 degrees Celsius (104 degrees Fahrenheit), and the growing demand for air conditioning increased pressure on the power grid.
The Chinese Communist Party (CCP) recently acknowledged that Sichuan is facing the “most severe and extreme moment” regarding energy supply.
Shopping and sports centers had to reduce consumption, causing restricted evening activities.
In Chongqing, the Chinese regime ordered to suspend factory activity for seven days to save electricity. Sichuan province, a key location for the semiconductor, solar panel, and lithium mining industries, did likewise.
Vice Premier Han Zheng visited China’s state-owned power corporation on Aug. 17 to calm widespread discontent in society. In a speech, he emphasized the importance of guaranteeing power supply to households over commercial and industrial activities, which will further increase the critical economic situation in the Asian country.
Industries in Sichuan will stop production from midnight on Aug. 15 to midnight on Aug. 20, 2022.
In addition, Jiangsu, Zhejiang, Anhui and other industrial provinces also experienced power outages.
Industries paralyzed by power shortages have a direct impact on GDP
The provinces of Sichuan, Yunnan and seven provinces and cities in the middle and lower reaches of the Yangtze River use hydropower and are currently burdened by power shortages. In addition, these industrial cities account for about 42% of the territory’s value added.
The impact on the economy generated by power outages is high. For example, in 2021, the aggregate value of the aforementioned industrial cities represented 39% of GDP (gross domestic product), so the negative percentage of the days without industrial activity would be 0.13%.
Considering that Sichuan supplies power to several neighboring provinces, and uses 78% of its installed capacity. Its capacity of 10 million kW possibly means that power outages are a daily occurrence, directly affecting the GDP.
For example, a Toyota company representative told AFP that it had to stop production at the plant in Sichuan’s capital, Chengdu, on orders from CCP officials.
The world’s largest electric vehicle battery manufacturer, Contemporary Amperex Technology, also halted production in the city of Yibin.
In 19 of the 21 cities in Sichuan province, the CCP ordered a suspension of industrial production until Aug. 20.
Large coal imports did not prevent power outages
The CCP said it would eradicate power cuts, after going through 2021 by suspending industrial activity due to energy reduction. For this reason, the Chinese regime stated that it would import coal in large quantities by 2022.
Coal imports in July increased 24% compared to June. The objective of avoiding energy rationing this year and not affecting industrial development apparently did not work.
In addition, the CCP commissioned 10 new coal-fired plants between January and Apr to ensure power supply.
Despite the fact that an increasing amount of coal is being stored in coal-fired power plants. Data released by the National Development and Reform Commission on July 14 shows that China’s coal-fired power plants have 170 million tons of coal in storage, 60 million tons more than last year. But that amount could only run for 26 days of power.
Drought in Yangtze River basin negatively affects the economy
Apparently, the heat and intense drought not only created an energy crisis, but also had an impact on other sectors of the economy.
The drought is severely affecting the development of agriculture and livestock. As a result, the Ministry of Water Resources said that drinking water for the rural population and livestock was reduced.
In that context, the CCP sent airplanes to seed the clouds with the chemical silver iodide in Hubei province to obtain water and energy.
Other regions in the Yangtze also tried making it rain with “cloud seeding,” but as the cloud cover is very thin, not a drop of water has fallen.
The Three Gorges Dam also failed to avoid the consequences of the drought and the CCP said it would discharge 500 million cubic meters over the next 10 days. The dam’s water flows represent half of the previous year’s content.
The scorching heat and drought has been going on for more than 2 months and is the longest in history, according to records since 1961, the National Weather Center reported.
China is apparently on red heat alert and at least 237 cities and counties across the country will have to endure temperatures above 40 degrees Celsius, the China Meteorological Administration reported.