China’s Curbs on Electricity Use Widen, Economy to Shrink

China’s power restrictions and forced cuts to factory production are becoming more common amid electricity supply issues. Experts predict the impacts from Beijing’s new policies will hurt the country’s economy.

According to local media the 21st Century Business Herald, the power crunch has expanded to more than 10 provinces, including China’s economic powerhouses of Jiangsu, Zhejiang, and Guangdong—three provinces that account for nearly one-third of China’s economy. 

Due to supply shortages, emergency power cuts were also ordered in 14 cities across the northern province Liaoning, said a notice posted on the local grid operator’s social media account on Sept. 23.

The crackdown on power consumption is driven not only by surging coal and gas prices, but also by Beijing’s emission-cutting targets. 

Analysts at Nomura Holdings warned in a note that, alongside the property sector, shock to China’s economy from issues with power supply may have been underestimated or even missed, and predicted that China’s economy will contract in the fourth quarter to 3.0 percent, from the previous forecast of 4.4 percent.