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Chinese factories close as drought hits hydropowerbusiness and economy

As President Xi Jinping seeks to expand his grip on power, economic tensions have risen as factories in southwestern China shut down after a worsening drought ran out of reservoirs used for hydroelectric power generation.

Companies in Sichuan province, including solar panel, cement and urea makers, have closed or scaled back production after being ordered to distribute electricity for up to five days, according to reports Wednesday.

This came after water levels in reservoirs dropped and power demand for air conditioners surged in the heat wave.

“Leave power for the people,” an order from the state government came Tuesday.

The shutdown poses a challenge for the ruling Communist Party as Xi, the most powerful leader in decades, breaks with tradition and prepares to award a third term as leader at a meeting in October or November. Add

Factory output and retail sales growth weakened in July, curtailing China’s economic recovery after Shanghai and other industrial centers were shut down since late March to combat the virus outbreak.

Economic growth in the first half of 2022 was only 2.5% y/y, less than half of the official annual target of 5.5%.

Regions in central and northern China have ordered emergency measures to ensure drinking water supplies after summer rains fell below half of normal levels. The state-run Xinhua News Agency said fire trucks brought water to his two dry villages near Chongqing in the southwest.

Hundreds of thousands of hectares of crops in central and northern China are wilting due to lack of water and high temperatures, according to the government. Some regions declare the summer growing season a failure.

The Bureau of Meteorology has warned that temperatures could reach 40 degrees Celsius (104 degrees Fahrenheit) in some areas.

Flood risk in other areas

In Sichuan, a province with a population of 94 million, water levels in reservoirs at hydroelectric power plants fell by up to half this month, according to the Sichuan Bureau of Economic Information and Technology.

A subsidiary of Guoguang Co., Ltd., which manufactures pesticides and fertilizers, will be closed from Monday to at least Saturday, the company said in a statement through the Shenzhen Stock Exchange.

Sichuan photovoltaic equipment makers, including Tongwei Solar Co. Ltd. and GCL-Poly Energy Holdings Ltd., said they had been notified to distribute electricity.

“The blackouts and production shutdowns have not had a big impact,” said Tongwei, business news outlet East Money reported.

China faced similar tensions last year when the southeastern province of Guangdong, one of the world’s most important manufacturing centers, ordered the closure of factories after sporadic rains ran out of hydropower reservoirs. Faced.

The government has allocated 280 million yuan ($41 million) for drought relief in Hebei and Shanxi provinces, northern Inner Mongolia and northeastern Liaoning province, according to Xinhua News Agency.

“Some small and medium-sized rivers have dried up and stopped flowing,” the report said.

Meanwhile, officials warned on Tuesday that flooding could occur in parts of the country as heavy rains are expected in areas from the northwest across Inner Mongolia to the northeast.

https://www.aljazeera.com/economy/2022/8/17/chinese-factories-close-as-drought-hits-hydropower Chinese factories close as drought hits hydropowerbusiness and economy

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