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China's Growing Power Crunch Threatens More Global Supply Chain Chaos (cnn.com) 146

Posted by msmash from the shape-of-things-to-come dept.
Hmmmmmm shares a report from CNN: A growing power supply crunch in China is triggering blackouts for households and forcing factories to cut production, threatening to slow the country's vast economy and place even more strain on global supply chains. Companies in the country's industrial heartlands have been told to limit their energy consumption in order to reduce demand for power, state media has reported. And supply has been cut to some homes, reportedly even trapping people in elevators.

An "unexpected and unprecedented" power cut hit three northeastern provinces on Monday, according to the Global Times, a state-run tabloid. The newspaper reported Tuesday that power rationing in Heilongjiang, Jilin and Liaoning provinces has "resulted in major disruptions to the daily lives of people and business operations." Power shortages have also hit the southern province of Guangdong, a major industrial and shipping hub. Local officials said Monday that many firms are trying to reduce demand by working two or three days per week. China's State Grid Corporation said Monday that it would "go all out to fight the tough battle of power supply," making every effort to secure residential consumption.

China was hit by a similar power crunch in June, but the situation is getting worse because of a perfect storm. Its industries are facing huge pressure from soaring energy prices, and from Beijing to tackle carbon emissions. The world's biggest polluter is trying to meet a pledge that its carbon emissions will peak before 2030. That requires its provinces to use less fossil fuel for each unit of economic output, for example by burning less coal to generate power. At the same time, demand for Chinese-made goods has surged as the global economy emerges from the pandemic. The result: not enough power to go round. The shock is even prompting economists to cut growth expectations this year for the world's second largest economy.
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China's Growing Power Crunch Threatens More Global Supply Chain Chaos More

China's Growing Power Crunch Threatens More Global Supply Chain Chaos

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  • Aren't they making alot of the solar panels, wind turbine parts etc...? just have 3rd shift make em not-name brand, and go green, like everyone else?

    • Anti-dumping regs hurting their solar industry (Score:5, Funny)

      by drnb ( 2434720 ) on Tuesday September 28, 2021 @10:33AM (#61841265)

      Aren't they making alot of the solar panels, wind turbine parts etc...? just have 3rd shift make em not-name brand, and go green, like everyone else?

      Anti-dumping regs are hurting their solar industry. If they are not getting the strategic benefit of destroying foreign solar panel manufacturing they just aren't as motivated to produce like that.

    • They can't build solar panels if they sanction Australian coal.

    • Re: steal green (Score:4, Interesting)

      by IdanceNmyCar ( 7335658 ) on Tuesday September 28, 2021 @11:51AM (#61841583)

      Taking your comment as sincere, we should consider a few things.

      First, China is rapidly bringing people out of poverty. This means the dude who spent his night under a blanket with some baijiu and a coal fire now gets to microwave his dinner, watch TV, use lights, and play on the phone. Most people won't do all these things at first but we are talking millions of people a year adding to residential power consumption.

      Also, while it's the second largest economy, it's probably number one for industrial power usage both in volume and person capita. This is because it's major industry is manufacturing instead of technology, which I believe is the largest sector of the US economy. In addition the industrial sector grows year on end by a significant amount as more people demand goods reliant on it.

      So when we consider this, you simply cannot scale up green energy while ramping down fossil fuels and still meet the full demand. China is considering ever option but their is also Beauracy to deal with. I would say corruption plays a big role in this at a provincial level and/or people who wish to act powerful by slowing necessary projects with regulatory process. Beijing creating this pressure especially on these provinces, is a sign to those leaders to get green energy growing but since these regions are far north, solar won't be a good option though wind could be. Likely nuclear is the best.

      So it's complex. FYI, I live in China but the Northwest and this is referring to the Northeast.

      • technology, which I believe is the largest sector of the US economy.

        Not the main point of your post, but the service sector is much larger. Manufacturing is also large (much bigger than Silicon Valley), just not the largest.

        • Re: steal green (Score:5, Informative)

          by hey! ( 33014 ) on Tuesday September 28, 2021 @01:32PM (#61841961) Homepage Journal

          On a dollar basis, manufacturing in the US has actually grown since the US opened trade to China, although the number of people employed has dropped substantially. In the US it's no longer a path out of poverty for unskilled or semi-skilled labor, although it apparently remains so in China.

          • In the US it's no longer a path out of poverty for unskilled or semi-skilled labor,

            That's ok those jobs sucked anyway. There are plenty of other options now.

            • Re: (Score:2)

              by sfcat ( 872532 )

              In the US it's no longer a path out of poverty for unskilled or semi-skilled labor,

              That's ok those jobs sucked anyway. There are plenty of other options now.

              That attitude is why democrats lose elections. Please stop helping.

              • If the truth is why democrats lose elections, then they deserve to lose. Get your head right don't treat it like a team game.

                In reality democrats win a lot of elections and have control of the house, the presidency, and almost in the senate.

      • Re: steal green (Score:5, Informative)

        by s122604 ( 1018036 ) on Tuesday September 28, 2021 @02:26PM (#61842129)

        So when we consider this, you simply cannot scale up green energy while ramping down fossil fuels and still meet the full demand.

        you can with nuclear power.

        • Nuclear power is not considered green energy ...
          Hint: the waste.

        • Nuclear power has regulatory overhead more than any other. It also requires the most skilled servicing of any other energy, if I am not mistaken.

          I suspect in China the latter is a bigger issue. At least in the US, there are many people who worked with reactors on our subs. China I do not believe has the same kind of practical advancement in nuclear reactors and they certainly don't need a Chernobyl like event to worsen their international relationships, much the less the cost of life that would follow. They

      • Re: (Score:3)

        by hey! ( 33014 )

        I think it's going to be difficult for China to continue to lift people out of poverty anyway. Not counting the COVID disaster, its GDP growth has been steadily declining from consistently over 10% a decade ago to around a more-normal 5% now. 5% is healthy, but if you're used to 10% that's going to be a tough adjustment.

        On top of that, two things have got China's trade partners questioning their dependence on China. The first is COVID related supply chain disruptions, which are not all China's fault by

    • There is no power outage. They have officials going into buildings and pulling the breakers.

      They are purposefully sabotaging manufacturing and buying up existing supply (at least in the US), perhaps to drive up prices or as a prelude to war.

    • Auto correct to confusion. Silver lining it is a minor consolation most folks would prefer economic activity but less pressure on environment much like Covid lock downs. Inflation slows. Chaotic times.

  • Second sources (Score:5, Interesting)

    by drnb ( 2434720 ) on Tuesday September 28, 2021 @10:29AM (#61841247)
    And this kiddies is why you have second, or even third, sources for critical components.

    And yes, diversification sometimes requires different nations not simply different companies.

    • China made it easy to get everything thing from them because... they simply make everything. You could get part A from China and part B from Australia, but then you're wrestling two nations' regulations, two nations' harbors, two nations' customs and controls... When you can get everything from a single place.
      Of course, Covid showed that putting all your eggs in the same basket wasnt such a smart idea after all, but most companies are Next-Quarter's-Report-minded, so we will see if they have learned any les

      • Re:Second sources (Score:5, Interesting)

        by hdyoung ( 5182939 ) on Tuesday September 28, 2021 @10:59AM (#61841365)
        covid is a bit of an afterthought in terms of why industries are getting serious about reducing reliance on China. More important reasons:

        1) The ruling party is giving serious signals that they've reached their limit of tolerance for capitalism. More state control of the economy is looking inevitable, and most foreign companies will be less welcome. In short, the business climate in China is looking to get a LOT less favorable for most foreigners in the next 5-10 years.
        2) China's government is starting to pound its fist on the table and yell loudly "we will bury the west". The west is starting to take it seriously. Trade barriers and tensions are probably inevitable.

        It would be better to trade freely, but this is how the world is going. Make some popcorn.

        • Re:Second sources (Score:5, Interesting)

          by OrangeTide ( 124937 ) on Tuesday September 28, 2021 @11:35AM (#61841533) Homepage Journal

          Xi Jinping was pretty annoyed that there are 90 million vacant or unfinished apartments [nbcnews.com] during a property speculation boom that propped up about a quarter of China's GDP in some years.

          These real-estate schemes aren't really very good capitalism either, they are debt built on top of debt. Eventually the government of China is going to be left holding the bag when the domino of defaults occur. I can only hope the grifters at Evergrande can escape China and avoid serving a life time in a forced labor camp.

          Corrupt capitalism, as practiced in China and the US, is about bailing out the banks after conmen manage to extract personal wealth through destabilization of the economy. The CPC is of course complicit in all of this, even if they were too stupid to realize what a pox a housing bubble can be. In the US it's a bit harder to control because of an unwillingness to restrict free enterprise, but we're pretty used to it and there is a resiliency built into the system through long experience (read: long abuse).

          • is about bailing out the banks after conmen manage to extract personal wealth through destabilization of the economy.

            I'm still upset about that. Those banks should have been broken up.

            • Re:Second sources (Score:4, Insightful)

              by OrangeTide ( 124937 ) on Tuesday September 28, 2021 @02:40PM (#61842189) Homepage Journal

              the citizen in me agrees, we shouldn't let failing banks exist and we shouldn't privatize gains while socializing loss.

              the macroeconomist in me knows that the short and medium term consequences are serious if you let the levers and engines of your economy fail. The time to rebuild a working system is currently long enough to be too painful for most people to safely endure. It's a problem that can lead to a decade long recession or an outright depression. Once money is tight, it is difficult to raise said capital in order to rebuild.

              • Re: (Score:2, Insightful)

                by phantomfive ( 622387 )

                the macroeconomist in me knows that the short and medium term consequences are serious if you let the levers and engines of your economy fail.

                The banks can be broken up and sold in pieces. To quote Paul Volcker, "Banks that are too big to fail are too big to exist." If there is a systemic risk, then that systemic risk needs to be dismantled.
                Practically speaking, there was no systemic risk from failing banks in 2008. Later investigation showed that was an unsubstantiated fear, although it may have seemed serious at the time (and banks did their best to make it seem more serious).

          • Real Estate is basically a Ponzi scheme. The early investors get paid by the money taken in from newer marks. This has been happening in the US for decades. Much of US prosperity is based on real estate including foreign money especially Chinese money. if you are going to invest in Ponzi schemes anyway , the Chinese govt prefers Chinese money goes into Chinese Ponzi schemes as at least while they are alive the companies generate jobs in construction. Any company which runs out of steal can declare bankruptc
        • China made a deal with the west. it would allow access to its huge market and manufacturing potential in return for tech transfer - direct, indirect (someone changing companies and taking learnt skills with them) and stolen.

          Now that China has almost caught up in tech the West is getting very cagey about sharing any tech especially the few areas where they still have critical advantages. China is not seeing much benefit in now keeping to the deal. So it wills tart closing its markets and start forcing its
          • You'd be right, if everything about the systems were equal. But they're not. China GDP per capita is 8k. Russia is 10k. Western countries are around 40-50k. So, depending on how you analyze it, the average chinese citizen is 1/3 to 1/5 as productive as the average western citizen.

            So, if China decides to close it's borders and self-rely, they will be relying on a VERY low productivity system. Even lower than Russia's, and the self-reliance kick they're on is making people seriously miserable. If China a

            • Re: (Score:3)

              by ghoul ( 157158 )
              At PPP values GDP in East Coast Chinese cities is at par with most cities in Europe and higher than middle America. Innovation happens in cities. Chinese cities are rich enough to hold onto innovators. Fewer and fewer Chinese students actually stay back in the US. Most go back as opportunities at home are good. If China is not trying to be export driven and they can let the currency float up then the Nominal GDP and PPP GDP will get close. Cities like Shanghai will have 6 figure dollar GDP per capita

            • That is the problem with GDP.
              Many things can not be compared.

              Productivity means many hours you spent to reach a result. Or if you want to nitpick about working hours per week, then productivity is the result of your work.

              Has absolutely to do with GDP per capita. I would bet a typical Chinese is much more productive than a typical westerner.

      • Its not just the convenience of one stop shopping. There is also the currency manipulation that pretty much puts everything on sale.

        • Re: (Score:2)

          by ghoul ( 157158 )
          Currency manipulation means things are more expensive for domestic Chinese customers who have to buy with devalued Yuans. Hence they lead a standard of living lower than what would be expected their skills and work hours. Currency manipulation is why a high school dropout in the US can lead a better life than a college graduate in China because he can buy cheap stuff at Walmart. Do you really want currency manipulation to stop?

          • Re: (Score:2)

            by drnb ( 2434720 )

            Currency manipulation means things are more expensive for domestic Chinese customers who have to buy with devalued Yuans.

            No, it only hurts Chinese consumers wishing to purchase foreign goods. So that too is good from the perspective of the CCP, it promotes domestic consumption.

            Hence they lead a standard of living lower than what would be expected their skills and work hours.

            Not really, life today with only Chinese made goods is quite an improvement over their parent's standard of living a couple of decades ago.

            Currency manipulation is why a high school dropout in the US can lead a better life than a college graduate in China because he can buy cheap stuff at Walmart. Do you really want currency manipulation to stop?

            It is also why the dropout can't get a job. If you have no job your lifestyle is going to suck, Walmart or no Walmart.

            Also, your comparison between a US HS dropout and a Chinese college graduate is, to put it gent

            • Re: (Score:2)

              by ghoul ( 157158 )
              China imports food. So currency manipulation means food is more expensive. That affects everyone. We are not talking about Prada bags. Just because Chinese lifestyles are better than 20 years ago doesnt mean they are as good as they would be without the currency manipulation. Currency manipulation is a kind of subsidy the chinese population pays to the western consumer in return for being able to engage economically with the west. A HS dropout in the US can get plenty of jobs - enough to eat, buy clothes an

              • Re: (Score:2)

                by drnb ( 2434720 )
                China's food imports are minor compared to its exports. The currency manipulation overwhelmingly benefits China. That is why they do it. There is no "subsidy" like behavior to the west other than when the west imposes sanctions.

                Wow, your characterization of US HS dropout and Chinese college grad are amazingly bad.

                • Re: (Score:2)

                  by ghoul ( 157158 )
                  Do you have any idea of living standards of a US high school dropout or a fresh college grad in China? For one thing Walmart is considered expensive in China

                  • Re: (Score:2)

                    by drnb ( 2434720 )

                    Do you have any idea of living standards of a US high school dropout ...

                    Yes, 55% are unemployed, 10% worse than HS gads. Their earnings are also significantly less. The unemployment of these individuals is tied to offshoring of jobs, so no predatory industrial policy is not benefitting them.

                    ... or a fresh college grad in China? For one thing Walmart is considered expensive in China

                    Walmart was a failure for cultural and strategic reasons in China. They did not understand the local market, the local consumer preferences. They could not compete against companies like Sun-Art that understood these things.

                • Re: (Score:2)

                  by ghoul ( 157158 )
                  If you knew any economics you would know it doesnt matter how much you import. Its how much you pay for the import because the market makes it so that you pay the same for stuff produced locally. And we are talking of basic stuff like Soy used to feed pigs and almost 90% of Chinese eat pork so the price of pork affects everybody. Yes people benefit from jobs at export factories but they would still have the jobs if they produce for the local market. But the harm from overpriced imports is real. When China d

                  • Re: (Score:2)

                    by drnb ( 2434720 )

                    If you knew any economics you would know it doesnt matter how much you import.

                    Oh please, don't pretend you understand Adam Smith. Free trade assumes fair trade. When there are barriers in one direction and none in the other the free trade model fails.

                    But the harm from overpriced imports is real.

                    Not when it is government policy to develop internal markets. The CCP wants Chinese consumers to buy Chinese produced goods so overpriced imports matches government policy goals.

      • Most of the COVID related slowdowns are at the port of LA not in China. if enough Union dockworkers had got vaccinated we would not be facing these issues.

    • Re: (Score:2)

      by ghoul ( 157158 )
      And thats why China is going to try and make Chinese airlines diversify away from Boeing and Airbus. The danger of a duopoly has been very clearly shown by the 737 Max saga. The C919 and the Russian Superjet will bring some needed competition and diversity of political risk. Especially US using sanctions to cripple supply of airline parts is a strategic issue since the Europeans will toe the US line to.

      • Re: (Score:2)

        by drnb ( 2434720 )
        There is not much diversity when you copy western tech. Or by diversity do you mean "we copied the Russians and the West"?

        • Re: (Score:2)

          by ghoul ( 157158 )
          Copies are generally more refined and the errors of the original are gone. I mean the C919 will definitely not dive into the ground because of a broken sensor. And we were talking of diversifying sources of supply not designs.

          • Re: (Score:2)

            by drnb ( 2434720 )
            No, copies often have problems because the original design decisions are not understood, and institutional knowledge not in the design documents is missing.
          • No. just no. Copies often copy the exact same flaws as the original. that's why they're copies. they're not spot checking for issues, they're just making wholesale copies. I've seen copied circuit boards from China with the same useless trace patterns( originally put in to identify copies) that the original had.
  • Hard to imagine this won't result in a lot of extra pollution as peaker plants are pressed into service, retirement of coal plants is delayed, etc etc... Granted it will probably spur growth in renewables too, but if the energy demand keeps growing by leaps and bounds, supplying some fraction of it by sustainable sources leaves us treading water, at beast.

    • Re: (Score:1)

      by Anonymous Coward

      Issue is not even capacity. There's plenty of capacity. There's not enough coal, because China has started closing down coal mines. This power crunch issue will probably force China to open up mines again, as it appears they are rationing for the winter, starting now...

  • Did China say that their infrastructure cannot handle a lot of crypto mining as a reason for the ban or did they not want to admit that?
    • In a rare display of candor, I do believe the Chinese government mentioned the excessive power use as one of the top reasons they banned crypto miners.

    • They didn't admit like that. The basic conclusion was it was exploiting a cheap resource. If I am not mistaken the power sector is one of the industries with pretty supreme control from the government. As such, price hikes like those that happened in Texas are impossible. I don't even know how plans to tackle smart grid would work here because I don't even think the cost of power fluctuations in any meaningful way at a residental level.

      Likewise they could tackle this via capitalism at an industrial level by

      • Electricity in China is also subsidized by the government, so the price paid by normal people is much cheaper than anywhere else in the world. That's why Bitcoin mining became dominated by China: they could do it cheaper than anyone else because the government was paying for their electricity.

  • The reason is money. (Score:5, Insightful)

    by iamnotx0r ( 7683968 ) on Tuesday September 28, 2021 @11:05AM (#61841385)
    Coal cost has increased from 2020 low of $46.18 in early September, now appears to be closing in on an all-time high of $195.20.

    Natural gas prices have been racing higher and are now 99% higher year-to-date, on combination of supply concerns and rising demand. https://www.cnbc.com/2021/09/0... [cnbc.com]

    China has to buy coal and gas, they do not create enough internally. Now winter is coming and the limited supply of coal and gas must be apportioned to residential.
    • China stopped buying coal Australia because of their political spats, this is a result. Australia may preemptively strike by slowing down iron ore sales to China to get back at them. Welcome to a global economy China.
  • I think those days are coming to an end. Even if they can stay cheap, it looks like that reliable part is starting to show signs of failing. I hope Corporations are taking notice and have a plan to mitigate reliance on one supplier.

  • If you want to solve this problem in your country (Score:3, Funny)

    by rsilvergun ( 571051 ) on Tuesday September 28, 2021 @11:16AM (#61841431)
    you need to start voting for Administrators instead of Personalities. In particular do not vote for actors. Their job is to make you think they're something they're not.

    The trouble is Administrators are boring as piss and can't/don't make you feel good about voting for them. But what they will do is solve problems and put people in charge (i.e. Bureaucrats, which are the people who actually implement the stuff we voted for) that are competent and know what they're doing.

    • Oh Schwarzenegger wasn't that bad. Even Reagan was entertaining. Now that peanut farmer however...

    • Re:If you want to solve this problem in your count (Score:4, Insightful)

      by GlennC ( 96879 ) on Tuesday September 28, 2021 @12:20PM (#61841725)

      Unfortunately, the Party kicked all the competent people out and replaced them with cheerleaders for "Team Red" and "Team Blue."

      • Voting based on party is a psychopathology.

        • That's all you can do. Winner take all means that you're always going to have only two political parties that are viable. Well unless one of the parties splinters and then you've got one viable political party. If you want to fix that you have to reform how we vote. You probably need to get rid of the Senate too.

          • No, you can vote based on who you think will do the best job. It's not always true that one party has all the competent people, and one party has all the incompetent people.

            • This is a losing argument. Every time I advocate this, cheerleaders from both side go crazy telling me how the other guys are the devil.
      • The Democrats have several capable administrators and that's the problem. Obama and pelosi were both competent enough but that's all they had going for them. The same goes for Chuck Schumer. The other side runs rings around them because there's so much better at politics. That's why Mitch McConnell could literally chuckle when his opponent brought up the number of deaths from coronavirus and he still won in a landslide. This is also why you constantly see Team Blue getting blindsided by Team Red. They expec

  • >The world's biggest polluter is trying to meet a pledge that its carbon emissions will peak before 2030. That requires its provinces to use less fossil fuel for each unit of economic output, for example by burning less coal to generate power.

    This makes total sense. When you're retarded.

    Whereas in real world, what makes sense is to maximize your emissions by 2030, so you that reduction from that peak is as painless as possible.

    That is if you even make a massive exception in China's state policy and actua

  • Don't fuck with Australia? That's the message I'm getting here.

  • Raise rates. If people can't afford the new rates, they can always mine more bittcoin to pay for it.

  • Cryptomining takes cheap power in China and exports it as Bitcoins. Stop Cryptomining and you have enough power for local industries to run. Or if you want a free market solution increase the cost of power. But in that case along with Cryptominers some other marginal instries also become unprofitable. China in recent years has built up enough hydropower that if it wants it can give up coal, it just will have to cede low end manufacturing where the key Chinese advantage had been cheap power and cheap labor.
    • Have you actually read any news lately? Bitcoin miners were pushed out by China and they have now made trading Bitcoin illegal. Of course there will be some illegal miners, but China predicted this power shortage and actually tried to mitigate it.
  • The author of this article isn't very technical. They repeat the word Power, but what they really mean is Electricity. There are many kinds of power: Horsepower, Purchasing power, political power, etc. To make matters worse, they conflate the supply chain problem with this power problem, and now we have a power supply problem!

    This article is gibberish.

  • More nuclear power. (Score:2, Insightful)

    by MacMann ( 7518492 )

    The world needs more nuclear power. If solar power was the solution to the world's energy needs then one would think that with all the solar PV panels coming out of China that China would not be seeing an energy problem.

    China is going to build more nuclear power plants. They have been stockpiling thorium for nuclear fuel for a long time now, and soon they will be using this to replace the copious amount of coal they have been importing.

    China will not be alone in this. We saw a deal made among UK, USA, an

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