Chinese factories shut as drought affects power supply

Factories in southwestern China have closed, and a city has implemented rolling blackouts after a reservoir’s power generation was low due to a worsening drought.

Companies in Sichuan province, including solar panel and cement makers, shut down or cut production after being ordered to cut power for up to five days, according to news reports on Wednesday.

This comes after a drop in reservoir water levels and a surge in electricity demand for air conditioners in extremely hot weather.

“Leave power to the people,” the provincial government’s order issued Tuesday said.

Power companies in Dazhou, Sichuan, a city of 3.4 million people, implemented a two-and-a-half-hour power outage this week and extended the outage to three hours on Wednesday, according to Shanghai-based news outlet The Paper.

Office buildings in the provincial capital, Chengdu, were told to turn off air conditioners, the Securities Times said.

The shutdown poses a challenge to the ruling Communist Party as China’s most powerful leader in decades, Xi Jinping, prepares to try to break with tradition by awarding himself a third five-year leader at a meeting in October or November term of office.

Growth in factory output and retail sales weakened in July, hampering China’s economic recovery after Shanghai and other industrial centers began closing in late March to fight the coronavirus outbreak.

The economy grew by just 2.5% in the first half of 2022 compared with the same period last year, less than half the official annual target of 5.5%.

The central and northern regions of China ordered emergency measures to ensure that drinking water supplies after summer rains are only half the normal level.

The official Xinhua news agency said fire trucks transported water to two villages near Chongqing in southwest China.

Hundreds of thousands of hectares of crops in central and northern China withered due to lack of water and high temperatures, according to the government. Some areas have reported a failed summer growing season.

The Bureau of Meteorology has warned that temperatures could soar as high as 40C in some areas.

A subsidiary of Guoguang, which makes pesticides and fertilizers, is closed from at least Monday to Saturday, according to a company announcement issued by the Shenzhen Stock Exchange.

Solar equipment makers in Sichuan, including Tongwei Solar and GCL-Poly, said they had been notified of power cuts.

According to business news outlet Dongfang Finance, Tongwei said “power outages and production stoppages have little impact”.

China is under similar pressure last year when the southeastern Guangdong province, one of the world’s most important manufacturing hubs, ordered factories to close due to lack of hydropower storage due to scarce rainfall.

The government has allocated millions for drought relief in Hebei and Shanxi provinces, as well as Inner Mongolia in the north and Liaoning in the northeast, Xinhua reported.

“Some small and medium-sized rivers have dried up and have stopped flowing,” the report said.