Beijing has ordered banks to support the financial needs of coal and energy companies. Almost two-thirds of the states are working on electricity distribution, and China’s electricity supply continues to challenge the economy.
“Banks and other financial institutions prioritize lending to qualified mines and power plants to ensure that they increase thermal coal and electricity production,” the Bank of China Insurance Regulatory Commission said in a statement. Must be done. “pdf)October 4.
The country is in the midst of a power crisis, combined with a shortage of coal and high demand from manufacturers, industry and households. This resulted in record high coal prices and forced widespread usage restrictions.
China’s current electricity crisis is reportedly affecting about 20 states and territories, accounting for more than 66% of gross domestic product (GDP).
Wall Street Investment Bank Morgan Stanley Estimated China’s energy demand has increased by nearly 15% in the last 12 months, but domestic coal supply has increased by only 5% so far this year.
Coal has long been important to China’s electricity generation and the economy as a whole, accounting for about 70% (pdf) Of national electricity.
More than 90% of China’s coal is mined locally, producing about 3.8 billion tonnes of coal each year over the last decade.Same level Like the rest of the world combined.
But Beijing has discouraged the burning of coal as the Chinese Communist Party (CCP) Leader Xi Jinping promoted greenhouse gas reduction Emissions Xi is currently focusing on enjoying the blue sky at the 2022 Winter Olympics.
Some financial institutions have stopped lending to the industry since the CCP set the goal of reducing coal’s share of the overall energy mix.
Meanwhile, coal prices soared to record highs following Beijing’s decision to suspend imports from Australia in 2020 due to a trade dispute. In addition, supply from Indonesia, China’s largest overseas coal provider, has been hampered by sustained rainfall.
Meanwhile, penalties for violating workplace safety rules have been raised from fines to possible imprisonment in the newly amended Article 134 of the administration’s criminal law., Further prevent mining operators from increasing production.
China’s energy distribution can exacerbate the lack of momentum across the country’s financial system. Wall Street banking giant Goldman Sachs has lowered China’s growth forecast for 2021 from 8.2% to 7.8% because of “pressure of serious shortcomings” due to power shortages.
China’s Official Manufacturing Purchasing Managers Index (PMI) data for September fell from 50.1 in August to 49.6. Economic indicators fell below a score of 50 for the first time in the last 19 months.
The 50 mark distinguishes between monthly growth and contraction.
“Manufacturing PMI has fallen below the critical point due to low sentiment in energy-intensive industries.” Said Statistics Bureau of CCP.