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Power cuts disrupt China, threatening growth and supply chains

22 Comments
By Beiyi Seow and Jing Xuan Teng

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22 Comments
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Doesn't help that China has seriously angered Australia, pushing it into the arms of its Anglo brethren and triggering it to cut coal exports to China. China is a like a bull in a china shop when it comes to foreign relations.

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The world's factory suffering power shortages because of lower coal imports. Something positive with coal-fired stations shut down. China has the highest number of coal-fired plants. More than 1,000.

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The key factor that causes shortages is inflexible prices. The power industry in China has state controlled prices, and if you allow prices to go up that should increase supply and reduce demand. For most of the last decade there has been a glut of power which is how China became a center of bitcoin mining.

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The new energy crisis has begun.

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Is this why they banned power hungry crypto currencies?

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What a magnificent idea. Turn China into the worlds manufacturing and assembly hub. Hoping for a Yeltsin-like shift, where Western corporate interests eventually purchase and own the assets and resources of China, as was done in Russia, establishing a, autocracy and oligarchy of billionaires in line with globalists interests.

Didn't work out, instead it paved the way for a Rostow model take-off and consequent rise to power of China, soon to ascend to world dominance and displace the soon-to-be failed state, the USA.

Wrought by all the fatcats in the West and Japan - a dependency that will undermine the corporate globalist world dominance by the West and shift it to Asia.

However, it doomed by limited resources, 'think' water, for beginners and the fantasy of expanding consumer culture. The list goes on. Sea rise anyone?

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Is this why they banned power hungry crypto currencies?

Partly.

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I wonder how the Taishan nuclear power plant about 135 km from Hong Kong is doing? The Chinese refused to shut it down when the noble gas leak was identified because they were already making factories shut down two days a week over a lack of generating capacity. I wonder if that is the next knife Mr. Xi will add to his juggling act?

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The key factor that causes shortages is inflexible prices.

Boycotting Australian coal had nothing to do with it?

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China's Achilles' Heel? We shall see.

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Yes boycotting our coal is one reason….hopefully we find other buyers, China can reap what it sows.

Our government has repeatedly tried to establish contact and dialogue but by all accounts it’s the Chinese side that’s being standoffish

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The power crunch comes as the country's energy demand soars past pre-pandemic levels, while restrictions on coal imports from Australia -- owing to a political stand-off -- squeeze supply.

There is no "political stand-off". China refuses to have minister level contact with Australia, while Australia has no such recalcitrance. China is shooting itself in the foot by refusing to honor trade deals that include coal shipments which are left sitting outside Chinese ports waiting months to be unloaded. Their coal shortage could be finished if they simply begin unloading all the coal carriers already waiting of China's coastline. Instead they try to urgently source coal from Mongolia because accepting coal from Australia right now is a political no no.

Xi says to his party, "no matter the pain and suffering it causes our people, we will make Australia pay for not doing our bidding". What a foolish man. Drop the stupidity and honor your trade deals and the pain goes away.

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This is the result of China being greedy and fighting with every country. Their economy is totally dependent on other countries.

More of this to come, until they collapse.

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@ Laguna, I like that, a bull in a china shop. Good metaphor haha. The Aussies really had no choice in suspending coal shipments. China bullies and angers every ally they try to make. I mean who can hate Australia? Even when the Aussies are angry they always sound happy because of the upward inflection of their accent! Can't say the same about China.

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China needs to build more atomic power plants as coal is a killer. Atomic, solar and wind will help clear up the skies of China and help millions to have a healthy life. Coal needs to be phased out.

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 The Aussies really had no choice in suspending coal shipments. 

Sigh, Australia didn't suspend coal shipments. China is refusing to accept coal shipments from Australia. There are huge bulk carriers sitting off the Chinese coast loaded with Australian coal the Chinese refuse to allow to be unloaded.

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China needs to build more atomic power plants

You mean like the one at Taishan that has a noble gas leak? Mmmmm, good choice.

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Rain volume was low this year = hydro-electric power was lower.

Wind energy was lower.

Europe is in a similar situation.

Natural gas (LNG) prices are high = it is foolish to think Japan is isolated from the rising energy prices after Japan shut down all the nuclear power plants after Fukushima. =Not just a China issue.

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rain volume was low this year = hydro-electric power was lower.

China had epic floods this past summer with dams overflowing and subways flooded.

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Another sharp knife in Xi Jinping's juggling act. That is three new knives added to his juggling act in the past two weeks with the abortion ban, bans on youth culture and now this. When will he miss one and poke himself?

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The key factor that causes shortages is inflexible prices.

Boycotting Australian coal had nothing to do with it?

Imo, it is supply and demand. If you suppress prices, demand will increase and supply at the same time decreases because there’s not enough money in it. Power plants are private businesses but rates are regulated and restricted by government; it is no longer profitable to produce power.

China imports 6% of its Coal consumption (272,221,858 tons in 2016). 93% of coal usage in China is produced in China,

China coal production is 50% of world’s total, China has plenty of coal. It is 1st in the world in coal production and 1st in coal consumption. The problem is that it consumes more than it produces.

In short, this is good for Australia to not place all her iron ore in the Chinese basket and also good for China to diversify and at the same time turn to cleaner energy. No one likes to take a walk in Beijing and have black nostrils.

China is going after the oil and gas in the Caspian Sea. It’s turning towards Turkmenistan as it cuts Australian supplies.

Australia lost out on beef, barley, cotton, lobster and wine. The US comes right in to pick it up. $ Ka-ching. Poor Australian farmers.

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mo, it is supply and demand. If you suppress prices, demand will increase and supply at the same time decreases because there’s not enough money in it.

You are confusing "demand" with quantity demanded at a given price. Demand is a line. generally a downward sloping curve that reflects how much of a product consumers are willing to buy at any given price. When prices are low consumers will buy more. When prices are high, consumers buy less. Demand had not changed, only the quantity demanded at a given price, which is defined by the demand curve, or just "demand.. The supply curve works the opposite way. At low prices, sellers are unwilling to make much. As prices rise, output rises, while at the same time as prices rise, the quantity demanded, not demand which has not changed, it's that line I mentioned, is reduced. There is a point where the supply and demand curves intersect that is the spot where supply equals demand and all the theories say this is the desired equilibrium price and quanity.

But power producers now face higher input costs. What that means is they will produce less electricity at a given price, so what has changed is the supply curve. With higher costs, power producers will produce less power at a given price. In this case you see the whole supply curve shift left. The new intersection of supply and demand, the new equilibrium price and quantity is at a point where prices are higher and output lower than the original equilibrium.

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