Tue, Sep 14, 2010 - Page 9 News List

Enforced power cuts hobbling China’s big firms

Energy is politically sensitive for Beijing, which is trying to clean up the battered environment and rein in growing demand for imported oil and gas, which it sees as a strategic weakness

By Joe McDonald  /  AP, BEIJING

Chinese steel mills and mobile phone factories are being idled and thousands of homes in one area are doing without electricity as local governments order power cuts to meet energy-saving targets set by Beijing.

Rolling blackouts and enforced power cuts are affecting key industrial areas. The prosperous eastern city of Taizhou has turned off street lights and ordered hotels and shopping malls to cut power use. In Anping County, southwest of Beijing, an area known as China’s wire-manufacturing capital, thousands of factories and homes have endured day-long blackouts over the past two weeks.

“We can’t meet deadlines for some orders and will have to pay penalties,” said Han Hongmai (韓宏邁), general manager of Anping’s Jintai Metal Wire Co.

“At home, we can’t use the toilet” on blackout days because of a lack of power for water pumps, Han said.

While the US and Europe struggle with flagging economies, the power outages are symptomatic of China’s torrid growth and officials’ capricious use of their powers to meet the authoritarian government’s goals.

China’s economic expansion, which hit 10.3 percent in the last quarter, blew holes in government efforts to curb surging energy demand, pollution and emissions of climate-changing greenhouse gases. Beijing told local leaders to clamp down and stepped up pressure by sending inspectors to see the order was being carried out.

‘BLACKMAIL’

“You could say local governments are trying to blackmail the central government: If you order me to do something I can’t deliver, I will pass on the pressure to ordinary people,” said Yang Ailun (楊愛倫), a spokeswoman for Greenpeace China.

The Cabinet’s planning agency, the National Development and Reform Commission, scolded Anping officials for the household power cuts. The provincial government issued an order to see that all homes have power.

However, it’s not the first time something like this has happened.

In 2007, gasoline shortages disrupted the economy after refiners cut production in response to price controls. The next year, parts of China shivered through blackouts during a bitter cold winter after the government froze power prices, prompting utilities to cut expenses by letting coal stockpiles run low.

This year’s power cuts began after Beijing announced last month that an energy-efficiency campaign had suffered a setback as a stimulus-fueled building boom drove growth in steel, cement and other heavy industry.

Beijing’s plans call for cutting energy intensity, or energy used per unit of economic output, by 20 percent from 2006 levels by this year. The World Bank says China uses up to twice the energy per unit of output as the US, Japan and other economies. Chinese officials say energy use is 3.4 times the world average.

Energy intensity fell by 14.4 percent by the end of last year after thousands of antiquated steel mills and other factories were forced to close, the government says, but it crept back up by 0.9 percent in the first half of this year.

Beijing reacted by ordering 2,087 steel and cement mills and other factories with poor environmental controls to close. The Cabinet stepped up pressure on local leaders by sending inspectors to 18 of China’s 32 provinces and major regions to enforce efficiency.

“They understand that if they fail to meet this target it could potentially cast doubt, not just internationally, but domestically, about whether China is serious about tackling its emissions,” Yang said.

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