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China Grapples With Power Cuts         09/27 06:05


   BEIJING (AP) -- Global shoppers face possible shortages of smartphones and 
other goods ahead of Christmas after power cuts to meet government energy use 
targets forced Chinese factories to shut down and left some households in the 

   In the northeastern city of Liaoyang, 23 people were hospitalized with gas 
poisoning after ventilation in a metal casting factory was shut off following a 
power outage, according to state broadcaster CCTV. No deaths were reported.

   A components supplier for Apple Inc.'s iPhones said it suspended production 
at a factory west of Shanghai under orders from local authorities.

   The disruption to China's vast manufacturing industries during one of their 
busiest seasons reflects the ruling Communist Party's struggle to balance 
economic growth with efforts to rein in pollution and emissions of 
climate-changing gases.

   "Beijing's unprecedented resolve in enforcing energy consumption limits 
could result in long-term benefits, but the short-term economic costs are 
substantial," Nomura economists Ting Lu, Lisheng Wang and Jing Wang said in a 
report Monday.

   They cut their economic growth forecast for China to 4.7% from 5.1% over a 
year earlier in the current quarter. They cut their outlook for annual growth 
to 7.7% from 8.2%.

   Global financial markets already were on edge about the possible collapse of 
one of China's biggest real estate developers, Evergrande Group, which is 
struggling to avoid a default on billions of dollars of debt.

   Manufacturers already are facing shortages of processor chips, disruptions 
in shipping and other lingering effects of the global shutdown of travel and 
trade to fight the coronavirus pandemic.

   Residents of China's northeast, where autumn temperatures are falling, 
report power cuts and have appealed on social media for the government to 
restore supplies.

   The crunch comes as global leaders prepare to attend a U.N. environmental 
conference by video link on Oct. 12-13 in the southwestern city of Kunming. 
That increases pressure on President Xi Jinping's government to stick to 
emissions and energy efficiency targets.

   The ruling party also is preparing for the Winter Olympics in the Chinese 
capital, Beijing, and the nearby city of Shijiazhuang in February, a period 
when it will want clear blue skies.

   Scores of companies have announced power rationing could force them to delay 
filling orders and might hurt them financially.

   Apple components supplier Eson Precision Engineering Co. Ltd. said Sunday it 
would halt production at its factory in Kunshan, west of Shanghai, through 
Thursday "in line with the local government's power restriction policy."

   Eson said the suspension shouldn't have a "significant impact" on operations.

   Apple didn't immediately respond to a question about the possible impact on 
iPhone supplies.

   China's energy consumption and industrial emissions have surged as 
manufacturers rush to fill foreign demand at a time when competitors elsewhere 
still are hampered by anti-coronavirus controls.

   China's economy is "more driven by exports than any time in the past 
decade," but official energy use targets fail to take that into account, 
economists Larry Hu and Xinyu Ji of Macquarie Group said in a report.

   Some provinces used up most of their official quotas for energy consumption 
in the first half of the year and are cutting back to stay under their limits, 
according to Li Shuo, a climate policy expert at Greenpeace in Beijing.

   Utility companies, meanwhile, are being squeezed by soaring coal and gas 
prices. That discourages them from increasing output because the government 
constrains their ability to pass on costs to customers, said Li.

   Prices have risen "past the range of what China's electricity industry can 
bear," Li said.

   China has launched repeated campaigns to make its energy-hungry economy more 
efficient and clean up smog-choked cities.

   City skies are visibly clearer, but the abrupt way the campaigns are carried 
out disrupts supplies of power, coal and gas, leaving families shivering in 
unheated homes and forcing factories to shut down.

   Shopping malls in the northeastern city of Harbin have announced they will 
close stores earlier than usual to save power.

   In Guangdong province in the south, the government told the public to set 
thermostats on air conditioners higher even as temperatures rose above 34 
degrees C (93 degrees F).

   State Grid Corp., the world's biggest power distributor, issued a pledge to 
ensure adequate supplies.

   Meanwhile, state media say local governments have signed long-term coal 
contracts to ensure adequate suppliers.

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