A sign of how fast the economy continues to grow: state media are reporting power shortages in several provinces. The China Electricity Council says it may be short of 30 million kilowatts of power come the peak summer season. Zhejiang, home of much heavy industry, is already facing its most severe shortages since 2004. Guangdong, Jiangsu, Jiangxi and Hunan are also suffering from shortages with some rationing already introduced.
This is mostly a structural supply demand imbalance though coal shortages are playing a part now, particularly the disruption of coking coal imports from Australia following flooding in Queensland. Nationwide, electricity consumption in the first quarter of the year was up 12.7% over the same period of 2010, exceeding 1 trillion kilowatts. Supply is struggling to keep up, with capacity expansion planned to increase by 9% this year. More grist for the mill of those wanting the expansion of the country’s nuclear power generation to be resumed.
Footnote: China Law Blog considers the implications for locating a foreign-owned small business.