Power rationing that forced factories in southwestern China to close has been extended until at least Thursday due to low water in hydroelectric dams, according to news reports and company announcements, adding to losses from the hottest and driest summer in a decade. The tense power supply situation in Sichuan province has further intensified, Tencent News reported on Monday. There was no public announcement, but the report included a photo of a government notice to businesses.
Drought and heat withered crops and caused rivers, including the giant Yangtze, to shrink, disrupting freight traffic. State media say the government will try to protect the autumn grain harvest, which accounts for 75% of China’s annual total, by using rain-making chemicals. The disruption adds to challenges for the ruling Communist Party, which is trying to shore up sagging economic growth ahead of a meeting in October or November when President Xi Jinping is expected to seek a third five-year term as leader.
Factories in Sichuan, which make processor chips, solar panels, auto components and other industrial goods, had to shut down or curtail operations last week to save energy for households as demand for air conditioning surged in temperatures of up to 45 degrees Celsius (113 degrees Fahrenheit). Air conditioning, elevators and lights were turned off in offices and shopping centers.
On Monday, LIER Chemical Co. said in an announcement via the stock exchange in the southern city of Shenzhen that its facilities in the cities of Jinyang and Guang’an in Sichuan had been ordered to extend the rationing system until Thursday. Some companies previously said supplies to customers were unaffected, while others said production would be reduced. The Shanghai municipal government said Tesla Ltd. and a major state-owned carmaker suspended production due to the disruption of component supplies from Sichuan.
The government says this summer is China’s hottest and driest since temperature and rainfall records began in 1961.Sichuan, with a population of 94 million, is particularly hard hit because it gets 80% of its energy from hydropower. Other provinces rely more on coal-fired power, which is unaffected. Economists say that if Sichuan reopens relatively soon, the national impact should be limited, as the province accounts for only 4% of China’s industrial output.
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