China blackouts: What will it cause to Chinese factories?

The blackouts spread in China since September 2021, and it seems will last for a longer time. The media in the world like BBC, New York Times, CNN all reported about this news. Some are telling the truth and have good analysis, some are somehow distorting the fact.

As a Chinese live in the east of China, I’d like to share my experience and also give some advice to our customers.

 

How’s China’s electricity power capacity?

It is true that China has the biggest population in the world, and that decides China needs the most electric power to ensure people’s daily life, industry function, and normal operation of the city.

When I was a child, at the age around 7, in the 1990s, it’s common that we will have several days of blackout in the summer. Usually, the electricity cuts in the daytime and opens again in the evening.

Considering the big shortage of electric power, the Chinese government put forward an idea of the “West to East” Electricity Transmission Project to solve the Energy Poverty in 1986.

It is an extremely difficult and enormous task, the project almost goes across all over the China map. It takes over 2 decades, the total investment is over 520 billion. By 2009, the project comes to end.

Actually in my memory, since 2003 we had never experienced blackouts again in life. While for factories, when in electric peak time in the summer, they will have several days blackout to ensure the life electricity needs, but this is not always seen.

 

How serious the blackout is going on now in China?

Since mid-September, more than 20 provinces in China have started orderly use of electricity, include Jiangsu, Guangdong, Yunnan, Guangxi, Zhejiang, Liaoning, Jilin, Heilongjiang Provinces.

Industrial enterprises in many places have been asked to switch peak power consumption. In northeast China, the restricted power supply has affected the normal operation of cities and residents’ daily power consumption, even beyond industrial and commercial power consumption.

Some factories are asked to open 5 days, rest 2 days, some open 4 days, rest 3 days, some may be more serious.

But the daily life and city operation is basically normal going, except some places in the northeast.

 

What caused China’s widespread blackouts?

Firstly, as the world is affected by the Corona Virus, the manufacturing distribution changes. Factories in some countries in Asia like India, Vietnam, Thailand were closed, the production get influenced. To ensure the global supplies, importers and distributors change their supply chain and choose to place orders in Chinese factories. The surging orders directly lead to more power demand.

Secondly, influenced by several factors, the price of coal has been pushed up more than 2 times. While more than half of Chinese power plants still rely on coal-fired. Under the strict electricity price controlling from the government, the power plants can not increase the price but are also unwilling to operate at a loss. So they choose to reduce the output instead.

Also, the rules imposed by the Chinese government that attempt to make the carbon neutral by 2060, could be one of the reasons too. And China is devoting to the industrial structure adjustment all these years, reduce pollutions, have a healthier and cleaner industry structure.

 

What is China doing to resolve the problem?

First, strengthen the unified dispatching of the whole network, arrange the operation mode reasonably, serve the power generation enterprises well, and do both should and do;

Second, coordinate and allocate resources, give full play to the advantages of large power grid platform, and tap the power transmission potential of trans-regional and trans-provincial channels;

Third, we will strengthen monitoring of electricity consumption, do the best to ensure electricity consumption for residents, provide good services to users and respond to their concerns.

Fourth, strictly implement the government’s demand response and orderly power consumption plan, timely do a good job in communication and coordination, and spare no effort to maintain the order and stability of power supply and consumption;

Fifth, strictly implement the responsibility of power supply guarantee, improve various emergency plans, strengthen the emergency duty of power grid operation, and ensure safe and reliable power consumption.

 

What advice do you have for importers?

It is a hard time both for our customers and our factory. The blackouts directly lead to delivery time delays. Because the factory can not open every day, the production capacity is dramatically shrunk.

So if you have seasonal orders that must be shipped at a special time, or hot selling items always need to be fulfilled in stock, please place the orders earlier to guarantee the shipment time.

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