Was China’s power crisis caused partly by an obscure mining law?

Name: Life with no power: Why some major cities in China are having to ration electricity
Uploaded: 2021-09-30T04:16:24.000Z
Duration: 3 min 30 s
Description: Life with no power: Why some major cities in China are having to ration electricity

Article 134 in China’s criminal law elevated penalties for a series of violations from fines to possible jail time in response to an increase in mining-related accidents

China’s current power crunch is affecting about 20 provinces and regions, representing over 66 per cent of its gross domestic product

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Coal has long been central to China’s power generation, and broader economy – the country produced around 3.8 billion tonnes of coal every year in past decade, the same level as the rest of the world combined. Photo: Xinhua

Bloomberg

Published: 12:16pm, 30 Sep 2021Updated: 12:33pm, 30 Sep 2021

China’s current energy crisis can be traced back in part to a legal amendment targeting miners that garnered little notice when it went into effect in March.

Article 134 in China’s criminal law elevated penalties for a series of violations from fines to possible jail time in response to an increase in mining-related accidents.

However, that law led to a new-found hesitancy among miners to boost production and intensified a supply deficit that could not come at a worse time for President Xi Jinping as the country faces a severe power crunch amid a surge in energy demand. The crisis also threatens to slow economic growth and snarl global supply chains.

The heightened punishments are a key reason that miners were hesitant to increase their output despite government calls to ameliorate the power crisis, according to five traders and analysts who spoke to Bloomberg this week on the condition of anonymity.

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Life with no power: Why some major cities in China are having to ration electricity

The industry’s ability to flexibly respond to demand surges has been further stymied by increased safety inspections and an anti-corruption campaign in a major coal-producing region.