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China's spat with Australia hurting China itself

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China's spat with Australia is hurting China itself though Beijing is loath to admit. This is clear from widespread blackouts particularly in the southern provinces after the country banned import of coal from Australia. Amid large scale outages not witnessed in a decade, power rationing for households and businesses has become the new norm across Jiangxi, Hubei, Guangxi, Hebei, Chengdu, Chongqing, Xi'an, Human and Zhejiang even as the winter was more biting than ever before. Beijing too has not escaped the power ordeal.

China uses coal to meet 70 per cent of its energy needs. Bulk of its coal requirements, about 60 percent, are used to be met by Australia. So, the policy prescription to teach a lesson to Australia became a pain to the Chinese people and to the Chinese industrial hubs that are emerging out of the shadows of Covid- 19 pandemic.

How quickly China's power companies will be able to put their act together is a big Sudoku. There is no denying that they are scrambling to secure alternate supplies by tapping Indonesia, Russia and South Africa. But much success has not yet come their way.

It is difficult to believe that Dragon was not aware of the consequences of the Australia coal ban order. There is much in public domain to show that several provinces had issued alerts about impending power outages.

Authorities in Changsha provincial capital, for instance, had asked the business owners to make "adequate preparations for unavoidable power shortages".

China's very own social messaging platform, Weibo, was flooded with pictures of elevators stopping in blacked out office buildings.

In cities like Yiwu (in Central Zhejiang Province) restrictions were placed on factory hours. Orders are out to turn off street lights ignoring safety concerns of the residents. And factories are asked to run on "part-time" schedule.

Located in East China, Yiwu is home to the world's largest trading market for small commodities. According to a factory owner, who does not want to be identified, some of them have been asked to shut down for one day every three days to the dismay of Arab traders who have been flocking to Yiwu market as the United States has become a distant Eldorado after the 9/11 terrorist attacks on New York. The Arab presence has fueled the rise of mosques and Middle Eastern restaurants in Yiwu, which is about 300 km from Shanghai.

The sprawling Zhejiang province is home to numerous textile and machinery related factories; this winter the factory owners were told to turn on the heat only if the temperature falls below 3 ï C.

At Wenzhou, the industrial city that straddles the Oujiang River on the East China Sea, the government instructed companies not to turn on their heating systems till the temperatures are close to freezing. Similarly, the cafeterias of government agencies, business and financial institutions are forbidden from turning on heating. The elevator luxury is only for reaching the fourth floor and above

In the mountainous Hunan province (in southern China) which was the early home of the Great Helmsman, Mao Zedong, elevators are shut down and climbing dozens of flights of stairs has become routine. On 04 December, officials put people on notice that energy shortage would last well into spring. As a short term nirvana, they ordered that lights be switched off from 10.30am to noon and again from 4.30pm to 8.30pm daily. No lighting of building facades and billboards, and no electric stoves and ovens. Power off on weekends despite with temperatures slipping below freezing, which has accentuated the demand for more energy.

Thankfully, the energy restrictions are not uniform throughout Communist China. For example, in the south-east province of Jiangxi, known as "Cradle of the Chinese Revolution", "Birthplace of Taoism" and "Porcelain Capital of China", peak hours are only subjected to restrictions. Message is, however, clear. China is face-to-face with longer-term problems in the energy sector. And the power crisis will impede its economic recovery from the Corona slowdown.

China is known for bullying its neighbours. It is also known for rattling them to fall -in line. Now it is a role reversal of sorts.

By banning the Chinese telecom company, Huawei, and by criticising the Chinese handling of Coronavirus outbreak, Australia had thrown up an open challenge to Chinese hegemony. Its membership of QUAD alliance has pushed China to the back foot.

There is another flip-side to China - Australia face off. It is the homily from Zhao Chenxin, the Secretary General of the China Electricity Commission. "Believe our ability to ensure stable energy supply", he told the people. And reminded them of Beijing's ambitious environmental goals.

President Xi Jinping has vowed to make China a climate leader and turn the country carbon neutral by 2060. But that goal seems like a mirage. In May 2020, China's carbon dioxide emissions from energy production, cement manufacture and other industrial uses were four per cent higher than that a year ago. All this makes China the world's biggest polluter emitting more carbon dioxide than the United States and the European Union combined.

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management consultant by profession I live in Boston and frequent Asia and Far East on business trips. Like most of my ilk, I am also a blogger and hit the blogspace at irregular intervals though. My subjects of interest are wide ranging from China (more...)
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