China turns off traffic lights amid power crunch

China turns off traffic lights amid power crunch

What really matters evergrand is not just a company it's a case study an example of everything wrong with the chinese economy whether. It's borrowing on steroids lack of transparency or apathy from the leadership. This isn't just an ever grand problem .This is a china problem. You could see it next in the energy industry a major crisis is unfolding there too chinese factories are going dark families are being asked to ration electricity simply put china is running out of power.

How does a wannabe superpower not have electricity well true two broad reasons number one is market forces coal and gas prices are going through the roof and chinese factories cannot keep up. They can't keep buying fuel at these exorbitant prices and reason number two china is trying to meet emission goals. This is a strange tactic. We can all get behind climate action.

We all agree that pollution must be reduced but is this the best way you can't simply turn off the lights at factories or leave families in the dark that's not what climate action means you have to build alternatives like solar plants like wind farms only then can you ration coal and oil but china is doing the opposite.

Let me tell you why half the regions in china have missed their climate goals they're emitting too much so what does beijing do shut the tap crack down on energy consumption china will hold the winter olympics next year and xi jinping wants clear skies. He doesn't want us to see the smog or the dust storms or the smoke gushing out from factories so basically he's trying to ban pollution well good luck with that the evergrand story is hiding the true extent of the power crisis in jiangsu province steel mills have been closed. 

Some cities they are turning off street lights in xiang 160 companies have been closed in liaoning 14 cities have ordered power cuts. There are reports of traffic lights being turned off remember we are talking about the world's second largest economy a country that wants to lead the world. They can't even keep their street lights on for the chinese this crisis is just getting started as they say winter is coming. You need power to heat homes to run generators but there is none available or not enough chinese families are being asked to use natural light. They're going through power cuts not ideal when temperatures can fall to zero degrees of course the chinese leadership could not care less they're not worried about their people they're worried about their precious economy no factories means no output and no output means economic contraction that's where china is headed experts say the chinese economy will contract in the final quarter of 2021.  

This slow down is likely to spill over major chinese factories are reporting a fall in output for example 

Suppliers to apple and tesla have shut their operations multiple companies have informed the stock exchange of the slowdown. We are talking about a wide supply chain from aluminium to textiles to microchips and soybeans all these commodities are in short supply and not to mention way too expensive. Now this will affect multinational companies. Some of them produce entirely in china others are dependent on parts and raw materials from china. We saw this last year as well the wuhan virus arrived so china locked down entire cities and provinces no warning no announcements the entire supply chain broke down one year later we are seeing a repeat another opaque policy another opaque shutdown.

You could see higher prices shortages lesser profits for multinationals it's like a chain reaction you see all because of one toxic link. So how do you fix this link. It's not like china does not have options.

For example import coal china can buy foreign coal to meet the shortage but there's a problem china's biggest coal supplier is australia and they are in the middle of a trade war with australia beijing has halted all energy shipments from australia and this is precisely the problem the chinese model of balancing growth and climate action is a failure because there's no transparency. There is no accountability and from the looks of it there is no planning china wants to market itself as a climate leader but it's not willing to put in the work.