Power rationing that forced factories in southwestern China to close has been extended at least Thursday due to low water in hydroelectric dams, according to a media report and a company announcement, adding to losses from a hotter summer and driest in decades. .
The tense situation of power supplies in Sichuan province has further intensified, Tencent News reported on Monday. There was no public announcement, but the report included a photo of the government’s notice to the companies.
Drought and heat have withered crops and caused rivers, including the giant Yangtze, to shrink, cutting off goods traffic. State media says the government will try to protect the autumn wheat crop, which is 75% of China’s annual total, by using chemicals to generate rain.
The shutdown adds to challenges for the ruling Communist Party, which is trying to shore up falling economic growth ahead of a meeting in October or November when President Xi Jinping is expected to try to give himself a third five-year term as leader.
Factories in Sichuan that make processor chips, solar panels, auto components and other industrial goods were asked to shut down or reduce activity last week to save energy for homes as demand for air conditioning soared in temperatures of up to 45 degrees Celsius ( 113 degrees Fahrenheit). ). Air conditioning, elevators and lights were shut off in offices and shopping malls.
On Monday, LIER Chemical Co said in a stock exchange announcement in the southern city of Shenzhen that its facilities in Jinyang and Guang’an cities in Sichuan received an order to extend power rationing until Thursday.
Some companies said earlier that supplies to customers were not affected, while others said production would be depressed.
The Shanghai city government said Tesla Ltd. and a major state-owned automaker suspended production due to a disruption in component supplies from Sichuan.
The government says this summer is China’s hottest and driest since it began keeping temperature and rainfall records in 1961.
Sichuan, with a population of 94 million, is particularly hard hit because it gets 80% of its energy from hydroelectric dams. Other provinces rely more on coal-fired power, which is not affected.
Economists say that if Sichuan reopens relatively quickly, the national impact should be limited because the province accounts for only 4% of China’s industrial output.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a shared source.)