Extreme weather conditions, growing demand and strict restrictions on the use of coal have led China to a catastrophic power shortage. The associated production and supply chain disruptions can threaten the global economy.

The government’s efforts to reduce the harm from coal-fired energy, which covered 60 percent of China’s needs, has led to the closure of several power plants and restricting the operation of key enterprises. By order of the authorities, companies are forced to completely suspend production for several days a week in order to save electricity.

“The metered use of energy will inevitably hurt the economy,” said Yang Qin, lead carbon analyst at Refinitiv. The deficit can severely reduce the volume of production in almost all industries, including the key ones – construction and manufacturing. These plants consumed 70 percent of China’s electricity in 2020, but they were the ones that contributed to the economic recovery in 2021.