China expands power rationing for factories amid drought | Business news

BEIJING (AP) — A power rationing that forced factories in southwestern China to shut down has been extended until at least Thursday because of low water at hydroelectric dams, according to news reports and a company announcement, adding to losses from the hottest . the driest summer in decades.

The “tense situation” of power supply in Sichuan province has “further intensified”, Tencent News reported on Monday. There was no public announcement, but the report included a photo of the government’s notice to the companies.

The drought and heat have caused the crops to grow and caused rivers including the giant Yangtze will shrink, disrupting the movement of goods. State media say the government will try to protect the autumn grain harvestwhich is 75% of China’s annual volume, due to the use of chemicals to produce rain.

The disruption adds to the challenges for the ruling Communist Party, which is struggling support the slowdown in economic growth ahead of a meeting in October or November when President Xi Jinping is expected to seek a third five-year term as leader.

Factories in Sichuan, which make processor chips, solar panels, auto components and other industrial goods, had to close or reduce activity last week to save electricity in homes as demand for air conditioning rose in temperatures of up to 45 degrees Celsius (113 degrees Fahrenheit). Air conditioners, elevators and lights were turned off in offices and shopping centers.

On Monday, LIER Chemical Co. said in an announcement via the stock exchange in the southern city of Shenzhen that its plants in the cities of Jinyang and Guanan in Sichuan province had been ordered to extend power rationing until Thursday.

Some companies previously said supplies to customers were unaffected, while others said production would be reduced.

Shanghai city authorities said Tesla Ltd and the major state-owned carmaker had suspended production due to disruptions in the supply of components from Sichuan.

The government says this summer is China’s hottest and driest since temperature and rainfall records began in 1961.

Sichuan, with a population of 94 million, was particularly hard hit because it gets 80% of its energy from hydroelectric dams. Other provinces rely more on coal power, which is unaffected.

Economists say that if Sichuan reopens relatively quickly, the national impact should be limited because the province accounts for only 4% of China’s industrial output.

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