China’s heatwave, power crunch adds to economic woes, inflation concerns even with rain set to fall
- China’s power crisis has been mainly caused by a lack of water flowing into hydropower facilities and high power demands due to a prolonged heatwave
- Rain and temperatures have started to fall in Sichuan province, but concerns remain that the economic and inflation fallout could still be ‘felt for months’
04:09
China’s historical heatwave bakes Sichuan province, slows hydropower stations
The extreme heatwave and power crunch along the Yangtze River Basin has added to China’s economic woes and inflation concerns, and further threatened the country’s status as the so-called world’s factory, even though the situation is expected to ease as rainfall kicks in next week, analysts and industry insiders said.
“It is mid-August already and most parts of China will pass their peak heat very soon, although the uncertainty remains on when the inflows to Three Gorges Dam will rise again,” said Larry Hu, chief China economist at Macquarie Group.
01:33
China’s largest freshwater lake facing earliest dry season on record
Part of Sichuan, including the capital of Chengdu, started to see rainfall and a drop in temperature on Wednesday night, and the National Meteorological Centre on Thursday said the hot weather in the province will recede from Monday, and for most parts of southern China from the middle of next week.
“In any case, if the power rationing in Sichuan only lasts a few weeks, the impact on the industrial production at the national level should be very limited,” Hu said last week.