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BEIJING (AP) – Global shoppers face a possible shortage of smartphones and other goods ahead of Christmas after power outages forced Chinese factories to close and some households in the dark to meet official energy consumption targets.
In the northeastern city of Liaoyang, according to the state broadcaster CCTV, 23 people were hospitalized with gas poisoning after the ventilation in a metal casting factory was switched off after a power failure. No deaths were reported.
Factories were shut down to avoid exceeding the energy consumption limits imposed by Beijing to promote efficiency. Economists and an environmental group say manufacturers used up this year’s quota faster than planned as export demand recovered from the coronavirus pandemic.
A component supplier for Apple Inc.’s iPhones said it had stopped production at a factory west of Shanghai by order of local authorities.
The disruption to China’s vast manufacturing industry during one of its busiest seasons reflects the ruling Communist Party’s struggle to balance economic growth with efforts to curb pollution and greenhouse gas emissions.
“Beijing’s unprecedented determination to enforce energy usage limits could lead to long-term benefits, but the short-term economic costs are substantial,” Nomura economists Ting Lu, Lisheng Wang and Jing Wang said in a report on Monday.
They said the impact could be so severe they lowered their economic growth forecast for China from 5.1% year-over-year to 4.7% in the current quarter. They lowered their outlook for annual growth from 8.2% to 7.7%.
Global financial markets were already nervous about the possible collapse of one of China’s largest real estate developers, Evergrande Group, which is struggling to avoid billions in default.
Manufacturers are already facing a shortage of processor chips, disruptions in shipping, and other lingering effects of the global travel and trade shutdowns to help tackle the coronavirus pandemic.
Residents of northeast China, where temperatures plummet in the fall, report power outages and appeal to the government on social media to restore supplies.
The crisis comes as world leaders prepare to video-link a UN environmental conference on October 12-13 in the southwestern city of Kunming. This increases the pressure on President Xi Jinping’s government, hosting the meeting, to show that it is sticking to its emissions and energy efficiency targets.
China is one of the largest emitters of climate-damaging industrial gases worldwide and consumes more energy per unit of economic output than industrialized countries.
The ruling party is also preparing for the Winter Olympics in China’s capital Beijing and the nearby city of Shijiazhuang in February, a time when it wants clear blue skies.
Numerous companies have announced that power rationing could force them to delay fulfilling orders and harm them financially.
Apple supplier Eson Precision Engineering Co. Ltd. said on Sunday that he would cease production at his factory in Kunshan, west of Shanghai, by Thursday “in accordance with the local government’s electricity restriction policy.”
Eson said the suspension shouldn’t have a “significant impact” on operations.
Apple didn’t immediately respond to a question about the potential impact on the iPhone accessories.
China’s energy consumption and industrial emissions have risen as manufacturers rush to meet foreign demand at a time when competitors elsewhere are still hampered by anti-coronavirus controls.
China’s economy is “more export-driven than it has ever been in the past decade,” but official energy consumption targets do not take this into account, Macquarie Group’s economists Larry Hu and Xinyu Ji said in a report.
According to Li Shuo, climate policy expert at Greenpeace in Beijing, some provinces have used up a large part of their quotas for energy consumption in the first half of the year and are throttling them to stay below their limit values.
Utilities, meanwhile, are coming under pressure from rising coal and gas prices. That prevents them from ramping up production as the government restricts their ability to pass costs on to customers, Li said.
The prices have “increased beyond what China’s power industry can take,” said Li.
China has repeatedly launched campaigns to make its energy-hungry economy more efficient and to clean up smoggy cities.
The sky over the city is visibly clearer, but the abrupt execution of the campaigns is cutting off electricity, coal and gas supplies, shaking families in unheated houses and forcing factories to close.
Shopping malls in the northeastern city of Harbin have announced that shops will close earlier than usual to save electricity.
In southern Guangdong Province, the government urged the public to turn the thermostats on air conditioners higher even if temperatures rose above 34 ° C (93 ° F).
State Grid Corp., the world’s largest power distribution company, is committed to ensuring adequate supplies.
Meanwhile, state media say local governments have signed long-term coal contracts to ensure sufficient suppliers.
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Soo reports from Singapore. The AP writer Huizhong Wu in Taipei, Taiwan contributed to this report.
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