Chinese government ordered its state-owned energy companies to secure fuel supply for the winter “at all costs”, as the country grapples with a power outage that threatens the growth in the world's second largest economy, according to state media reports on Friday.
The move came after China was plagued by extensive power outages, which forced companies to close or partially close, disrupting output and worldwide supply networks.
During an emergency meeting, the vice-premier Han Zheng said he instructed country’s energy providers to ensure that enough fuel is available 'at all costs' to keep the country operating, stressing that China “will not tolerate blackouts.”
The country's energy crisis was caused by several factors including rising international demand as economies reopen, record coal prices, governmental electricity price regulations, and strict emissions objectives are among others.
Chinese coal futures hit a new high on Thursday as the country battled shortages in the run-up to a national holiday, with many companies closed for the week.
China's factory activity unexpectedly dropped in September for the first time since the Covid-19 outbreak hit in February 2020, according to data released on Thursday. The lower-than-expected manufacturing survey was due to restrictions on electricity use and rising commodity prices.
Earlier this week, Goldman Sachs said it cut China’s growth forecasts for this year prompted by estimated disruptions to supply chains and production.
Apple and carmaker Tesla have also been affected by the supply disruptions and decided to halt production.
By Sibel Morrow