With China’s economy strong and our forecast that it will grow some 8 percent this year, its factories are having a hard time keeping on top of pent-up demand.
The Financial Times reported on Thursday that Beijing ordered factories in industrial areas to use less power… and, in some cases, even close for a few days to prevent power shortages.
Klaus Zenkel, the chairman of the EU Chamber of Commerce in South China, told the paper that factories in Guangzhou and Dongguan are trying to catch up with demand due to backorders.
He called the request by the government for intermittent closures “quite unreasonable.”
“It’s an infrastructure issue that needs to be handled immediately,” he said.
The Wall Street Journal reported that some of these factories are even turning down orders.
The FT reported there has been a challenging mix of demand and lack of rainfall in some of these areas dealing with power issues.
Factories in Guangdong province rely on hydropower to a certain extent. There has been an effort by these plants to meet Beijing’s carbon emission targets, and these operators have bristled at using more coal for power.
TREND FORECAST: Precisely as we had forecast, when the COVID War winds down, Climate Change would be back making the headlines. The FT also reported that JPMorgan and Fidelity will demand that five of Asia’s most-polluting power generating companies cut their greenhouse gas emissions as part of a new climate change program and that utilities in mainland China, Hong Kong, Japan, and Malaysia that operate large coal-fired operations have been targeted.
Despite the push for clean energy, the bottom line is coal is cheaper. Most developing nations will continue to burn it until there is a more efficient alternative energy.
TREND FORECAST: TOP TREND 2021: THE RISE OF CHINA: As we have forecast, the 20th century was the American century – the 21st century will be the Chinese century. The business of China is business; the business of America is war.
While America spent countless trillions waging and losing endless wars and enriching its military-industrial complex, China has spent its trillions advancing the nation’s businesses and building its 21st-century infrastructure. And while America and Europe have outsourced their manufacturing to China and developing nations to increase profit margins, China’s dual circulation/self-sustaining economic model is directed toward keeping jobs and trade and profits within the nation, thus relying less on global trade.
While Western nations lock, unlock, and re-lock down their economies, China, where the virus first broke out, has been completely reopened since shortly after the virus left its homeland last year.