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China restricts electricity in 20 provinces
Wang Fang and Wang Zhen
6/21/2004



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Severe electricity shortages have forced China to impose usage restrictions in 23 regions, affecting about 20 provinces and cities. Several foreign-owned businesses have had to limit operations as a result.

The Chinese National Electric Watch Committee estimates that China will have electricity shortages of more than 20 million kilowatts in 2004. The country’s populace is getting itchy, as the electricity supply is even worse than in 2003. The problem continues to linger and more regions are facing restrictions.

The areas with the worst electricity shortages this year were primarily eastern China, followed closely by northern and western China, then the southern and some parts of the central China electrical power network. Jiangsu, Zhejiang and Shanghai in East China were most seriously affected by the shortages. Eastern China is short 10 to 15 million kilowatts, southern China is short 5 million kilowatts, northern China is short 3 million kilowatts, and central China is short 3 million kilowatts.

Shanghai officials estimate that city usage levels during peak time will reach 16 million kilowatts. This could represent a power shortage of 2 million kilowatts. The electrical power department in Nanjing city, Jiangsu province, has made plans to limit electric power usage in 2004 and will restrict power usage to businesses, supermarkets, office buildings, hotels, restaurants, and government offices.

During 2003, 20 provinces had to cope with different degrees of power outages. The Yangtze River region and surrounding area was impacted most severely. Residences were divided into groups of odd and even numbered homes. Many foreign-owned companies also experienced power blackouts without prior notice. Some foreign manufacturing companies decided to buy diesel oil generators, which caused a shortage of diesel oil at gas stations.

Foreign-owned Businesses Closed

Recently, officials from the National Development and Reform Committee reported that in regions with severe electricity shortages, some manufacturing companies were on alternate schedules, “closed for three days, opened four days,” or “closed one day, opened one day.”

The New York Times noted that a motorcycle manufacturer in the mid-eastern region of China was forced to shut down his factory for three days a week, because of power shortages. This resulted in a 4% price increase, with further price increases highly probable.

Several Japanese companies operating in China also modified or shortened their operating schedules. This resulted in reduced production and delays in product delivery. One of Panasonic’s companies in the Shunde District of Foshan City in Guangdong Province has been without power on Mondays and Tuesdays since February. Honda Automobile in Guangzhou has been asked to close every Friday and Kirin in Zhuhai has been asked to close every Wednesday.

China is attempting to address problems that are due to power supply shortages. The National Development and Reform Committee reported that power generation capacity between January and March of this year was 15.7% higher than at the same time last year. Given that companies in the steel and metal industry are power hungry, the power supply problem has not been resolved, although China is also importing electric power.

Since April of this year, Heihe City in Heilongjiang Province (near the Chinese/Russian border) has purchased electricity from two hydroelectric power stations of Russia’s Far East. Xinhua Net disclosed that China agreed to purchase a total of 15.4 billion volts of electricity from Russia for Heihe between 2004 and 2013

Experts believe that these measures will soften the problem, but that the fundamental problems of the electricity shortage are still unresolved. Resource development, resource allocation and efficient usage need to be addressed, they say. China currently has the world’s highest energy consumption at the lowest cost. The GDP of one kilogram in coal energy is $0.36 in China and $5.58 in Japan. The world average is $1.86.

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