China cuts power to factories and homes as reservoirs fall

By JOE McDONALD
AP Business Writer

BEIJING (AP) — Factories in southwest China have closed and a city imposed blackouts after reservoirs to generate hydropower ran out during a worsening drought, adding to economic tensions at a time when President Xi Jinping is trying to extend his grip on power.

Companies in Sichuan province, including makers of solar panels, cement and urea, have closed or reduced production after being ordered to ration electricity for up to five days, according to reports on Wednesday. . It happened after reservoir levels plummeted and electricity demand for air conditioning increased in scorching temperatures.

“Leave the power to the people,” reads a provincial government order dated Tuesday.

In Sichuan, which has a population of 94 million, water levels in hydroelectric reservoirs have halved this month, according to the Sichuan Provincial Department of Economy and Information Technology.

The power company in Dazhou, a Sichuan city of 3.4 million people, imposed 2.5-hour power cuts this week and extended this Wednesday to three hours, according to Shanghai newspaper The Paper. The Securities Times newspaper said office buildings in Chengdu, the provincial capital, had been ordered to turn off air conditioning.

The shutdowns add to challenges for the ruling Communist Party as Xi, the country’s most powerful leader in decades, prepares to try to break with tradition and give himself a third five-year term in office in a meeting in October or November.

Growth in industrial production and retail sales weakened in July, dampening China’s economic recovery after Shanghai and other industrial hubs shut down from late March to fight virus outbreaks.

The economy grew just 2.5% from a year earlier in the first half of 2022, less than half the official annual target of 5.5%.

Parts of central and northern China have ordered emergency measures to ensure clean water supplies after summer rains were as low as half of normal levels. The official Xinhua news agency said fire trucks were carrying water to two dry villages near Chongqing in the southwest.

According to the government, hundreds of thousands of hectares (acres) of crops in central and northern China have withered due to lack of water and high temperatures. Some regions reported that the summer growing season was a failure.

The weather agency warned that temperatures in some areas could reach 40 degrees Celsius (104 Fahrenheit).

A subsidiary of Guoguang Co., Ltd. which manufactures pesticides and fertilizers is closed Monday through Saturday at least, according to a company announcement via the Shenzhen Stock Exchange.

Sichuan solar power equipment manufacturers including Tongwei Solar Co. Ltd. and GCL-Poly Energy Holdings Ltd., said they had received electricity ration notices.

Tongwei said “the power cut and production stoppage didn’t have much impact,” the East Money business newspaper reported.

China faced similar tensions last year when southeastern Guangdong province, one of the world’s most important manufacturing hubs, ordered factories to close after hydroelectric reservoirs exhausted due to rare rains.

The government has allocated 280 million yuan ($41 million) for drought relief in Hebei and Shanxi provinces and the Inner Mongolia region in the north and Liaoning province in the northeast, according to Xinhua.

“Some small and medium-sized rivers are so dry that they have stopped flowing,” the report said.

Meanwhile, authorities have warned that parts of the country could be flooded due to heavy rains forecast in northwestern regions through Inner Mongolia to the northeast.