China is undergoing a rough economic patch at the moment. Their steel mills are having power cuts, property companies are purchasing less construction material, and the country is also under more floods as of recently. China is still growing but at a slower rate than they were last year from 4.9 percent to 7.9 percent. China's industrial output has not been very good as it put up numbers last quarter more similar to when the pandemic first hit.
The Chinese government has recently put a limit on energy use. This is stemming from concern with climate change and also income inequality in China. This has backlashed on China as the industrial side of the country is short on power and now burning coal, which goes against one of the reasons they have for limiting energy use in the first place.
https://www.nytimes.com/2021/10/17/business/economy/china-economy-gdp.html
4 comments:
It makes sense that they are struggling to grow at a slower rate than they have in years past. Being put on an energy limit will impact the production and efficiency of a country without a viable second option for energy. It is very strange that China is limiting power consumption over the concern for climate change, yet they are using coal as an alternative. Until a secondary, cleaner source of energy is abundantly available to use, China is going to be stuck with the decision of whether climate change is more important to them or growing their economy.
China is currently trying to force companies to come up with alternative sources of energy by limiting power consumption. It is another event that is reflective of China's strong government control as such policy would face an incredible amount of resistance from energy industries in a Laissez-faire economy. The intention is good (address climate change), but I don't think they realize that it will take much longer for companies to find more affordable sources and develop cleaner energy. Coal mines were closing when the economy was not ready. As a result, coal prices have skyrocketed as the nation struggles to meet rising demands as it spends on heavy industry, real estate, and infrastructure construction to spur economic growth and recovery from COVID-19. Therefore, they have to reopen many of the coal mines and rollback their earlier policies about greener enegery.
China exports some of it's coal from Australia which is the second largest producer of coal. China has the resources to switch to more renewable sources of energy and should invest into doing that.
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