Northeast China: Power cuts cause trouble

In China, entire cities and industrial parks are increasingly being turned off – sometimes without notice. One of the reasons: producing electricity has become expensive. German companies there are also feeling the effects.

Candlelight instead of electric lighting. Water pumps that no longer work. Families with small children who live in high-rise buildings and now have to climb 20 floors of stairs because the elevator no longer works. Northeast China is particularly hard hit by the power cuts. For example, the eight-million-inhabitant city of Shenyang in the Liaoning region.

“The power suddenly went off from 4 pm to 11:30 pm,” said a Shenyang resident in an online video from the Xin Jing Bao newspaper. “They even turned off the electricity in the canteens and restaurants around here, which is particularly bad because we have a lot of workers here who have to be fed.”

In at least 16 of the 33 parts of China, the power cuts are also causing problems for industry. Factories and entire industrial parks have to be shut down. Virtually everyone is affected: from large Chinese state-owned companies in heavy industry to foreign companies.

Often without notice

Often the companies are warned only briefly or not at all, says the President of the European Chamber of Commerce in China, Jörg Wuttke: “In nice cases, the companies were given two to three days’ notice. In Shenyang, in northern China, one had one day’s notice In Tianjin, it was decided at short notice to turn off the electricity immediately. ”

Many German companies are also affected. Volkswagen explained that in some factories in China, individual shifts had to be removed, mainly because suppliers’ electricity was turned off and parts are now missing.

The China boss of a German DAX company said that ARD radiothat the companies are primarily concerned with the arbitrariness of power cuts. One cannot plan, everything is non-transparent and there is no legal certainty. He has been in China for 30 years and has never seen anything like it.

There are several reasons for the power to be turned off. In China, two thirds of it still comes from coal-fired power plants. However, coal has recently become so expensive in the People’s Republic that some power plant operators can only produce electricity with great losses and therefore prefer to switch off the plants.

At the same time, the demand for electricity in China has risen sharply in recent months, because after the Corona slump, foreign countries are now buying more Chinese products again. In addition, there are new requirements from the government in terms of climate protection and CO2 emissions, to which the provinces sometimes react brutally with shutdowns.

Jens Hildebrandt from the German Chamber of Commerce in China says: “Of course, the German economy supports China’s goals of reducing carbon dioxide emissions, for example through new industrial processes and new products. But we also need planning security. In this respect, we fundamentally understand the topic . But we have no understanding of how this is being implemented with the power cuts. ”

There is no legal basis

Wuttke warned in Shanghai that in the medium and long term, many foreign companies would face the question of planning security in the People’s Republic. “The whole thing has no legal basis. There is no advance notice, no corresponding papers and no explanations from the government. The information comes over the phone – or it marches past you or immediately turns off the power. That raises the question of to what extent you still have planning security. ”

The global supply chain problems are likely to be exacerbated by the power cuts in China. Some foreign analysts are now expecting that China’s economy will grow less strongly than expected this year because of the power cuts. The Japanese financial company Nomura lowered its growth forecast for the last quarter in China from 4.4 to three percent.