Chinese authorities are putting pressure and decreasing electricity supply for companies to fight climate change

The sudden and unexpected power cuts across various parts of China have been pushing some foreign companies to take their investment elsewhere. For the past several days, many local Chinese governments have provided limited power usage, restricting and disrupting the factory operation and production. The latest decline in the power usage comes with the country facing a rapid shortage of coal for generating electricity, and regional authorities have been witnessing a growing increased pressure to comply with the recent central government’s measures of reducing carbon emissions. Some companies were looking forward to investing in China. However, they have now their shifted elsewhere.

The planned foreign business investments were expected to be in millions of U.S. dollars. While China still happens to be a key destination for manufacturing, and operational purposes, one of the analysts have been stating that the businesses have been now looking to invest in Southeast Asia, with Vietnam being one of the preferable spots. Nobody is really aware of the present situation, and how it’s expected to build and develop, how it’s expected to get implemented in the coming months across cities and provinces.

For the past week, many of the Chinese cities from export hubs of Guangdong to Shenyang, have instated orders for restrictions on electricity use which came with no prior notice. The sudden move has prompted some Chinese economists to decline their GDP forecasts for the next year. Guangdong province is regarded as the biggest exports in China, registering about 23% of the total exports this year all the way through August. Liaoning province is ranked at 16th spot in terms of exports, and contributes 1.6% of the national total exports. The growing uncertainty in the short term for electricity is something that companies could only consider for a week or so. However, not in the long term. The cuts are anticipated to follow like this in the coming quarters as well.