China is facing one of its biggest power crises in decades, with up to 20 provinces in the country having to cut down on consumption, forcing factories to work fewer days and schools to let kids play outdoors to avoid consuming electricity in classrooms.
It's an effect of the global pandemic, as Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air in Helsinki explained that China's coal consumption "shot up like crazy in the first half of the year because of a very energy-intensive, industry-driven recovery from the COVID-19 lockdowns."
Myllyvirta explained to NPR that China's export industry came back to life after shutting down during last year's COVID outbreak, so electricity-guzzling factories came back online to support China's recovery from the pandemic-induced economic slowdown. But the problem is that China's coal resources simply cannot keep up.
World Politics Review explained that China's electrical shortages are "being driven mainly by dwindling coal supplies and tough government mandates on emission reductions."
Thermal coal, which China uses to generate electricity, has tripled in price. Up to 90% of the country's supply is domestically mined, but mining volumes have dropped by 17.7%. Energy providers are expected to pass on the increased price of coal to its consumers, but the reality is that they can't due to the government's mandate to cap electricity utility rates. This causes power plants to operate at a loss, or opt to not operate at all, which then causes power outages and rationing.
Because the world relies so much on China's factories to churn out almost everything from appliances to clothing and technology as well as supplies, the country's electrical shortages will definitely have some global implications. According to the Gateway Pundit, China's manufacturing hubs are "shrinking faster than China or the media will let on" from coal prices shooting up to the solvency crisis of Chinese real estate firms such as Evergrande, the communist state is facing a financial crisis.
China's electrical shortages have caused manufacturers in some areas such as Dongguan in Shenzhen to operate only three out of seven days a week or even less. Chinese citizens are also worried that the power crisis will cause the prices of common goods to soar, which is why some have reportedly resorted to panic buying supplies. Some people are now stockpiling inventory or buying equipment that uses less power. Candle manufacturers are now facing a spike in demand.
"You are going to see, in the next year, empty shelves everywhere," political commentator Glenn Beck said on his show, as reported by The Blaze. "That's if the economy still is chugging next year."
"If it's not, you're definitely going to see empty shelves. But you're gonna see the supply chain collapse," Beck predicted. "When the supply chain collapses...because when a truck can't go to your grocery store eight times a day to replenish the shelves...you don't have anything on your grocery shelves."
Beck's co-host, Steve Burguiere read a quote from Simple Modern CEO Mike Beckham who said, "There's a major storm brewing in the supply chain. It could dramatically impact everyone's life next year but almost no one knows about it yet. We're talking about empty shelves, crazy inflation, etc."
Beck suggested that Americans should do their Christmas shopping as soon as possible, as supplies are forecasted to run out soon and well into 2022 following China's electrical shortages and power crisis. He also predicted delays in deliveries of a number of goods, appliances, and more entering 2022.
