julia@suryagrass.com
What factors forced the power rationing in China?
China’s power rationing and mandatory reductions in factory production are expanding.Around the Chinese Mid-Autumn Festival 2021, more than 16 provinces in China suddenly issued power-cutting orders, causing many companies to restrict production and stop production. What's the reason behind the sudden power rationing in China? What impact will it bring?
Let's start from the reasons.
According to statistics, in China, residential electricity consumption accounts is only 13.6% of the total electricity consumption, the tertiary industry accounts is 13.4%, while the industrial electricity accounts percentage is as higher as 71.1%.
Since the outbreak of the COVID-19, the normal international trade order was disrupted, China has received more and more orders from overseas, while the importing in China is stucked. The increase in order volume has caused a series of problems to Chinese exporters: rapidly expanding production capacity, increased raw material & transportation cost, smaller profit margins etc.
The above problems are tightly related to the factor of power supply.
China’s current electricity supply burden is very heavy. In many provinces, expecially Guangdong, Guangxi, Jiangsu, Zhejiang, Ningxia, the electricity consumption is far beyond expectations. That situation is going in the opposite direction with China’s energy-saving and emission-reduction targets. China aim to be an example as internation enforcement of environmental regulations follower.
Obviously the best way to overcome the problems of power supply issues and enforcement of environmental regulations is controling the industrial electricity consumption.
What impact will the power rationing bring?
In the short run, the selling prices of all Chinese goods will increase in the coming few months, and there may cause a situation in which Chinese goods are in short supply in the market.
In the medium run, global traders will have a better understanding of Chinese products. When they choose Chinese products, they will pay more attention to the performance and value of products, instead of focusing on price comparing too much.
In the long run, the excess capacity in China will be effectively controlled, the value of Chinese goods will be further improved, and Chinese companies will be able to serve the world better.
We are an artificial grass factory from Shandong, we are under big pressure of power rationing as well. As a Chinese supplier, we believe in Chinese Government, we believe in China’s Global Pledge.
In the end, we appreciate so much of the always support from our faithful partners, we are expacting the future we all be better together.