The next problem for China's economy after Evergrande
The power crunch in China is going to have a severe impact on the economy towards the end of Q3 and as we approach Q4, as surging coal and gas prices alongside strict emissions targets from Beijing are resulting in a power supply shock.
The Global Times is now reporting that:
"Multiple semiconductor suppliers for Tesla, Apple and Intel including ESON, Unimicron and ASE Groups, which have manufacturing plants in the Chinese mainland, recently announced they will suspend their factories' operations to follow local electricity use policies."
In part, the energy crisis faced by China is brought about by its own doing as the government is cracking down heavily on energy consumption, with Xi Jinping aiming for "blue skies" ahead of the Winter Olympics in February - due to take place in Beijing.
This is the latest edition to the global energy crisis and puts further strain on the Chinese economy, as it risks a severe shortage of coal and gas - likely to result in rations among factories/businesses and also hit consumers hard amid the higher prices.