While Barack Obama is falling all over himself praising the Chinese infrastructure, and telling us that we should be learning from how the Chinese do things, the true story is far different. The Daily Telegraph tells us that the Chinese are facing an absolutely crippling power shortage.
China’s industrial heartland is facing crippling power shortages, with more than a dozen provinces already rationing electricity.
The country is suffering from its biggest power crisis since 2004, when a 40-gigawatt shortfall left three quarters of China in the dark.
Since then, demand for electricity has doubled, but the government has fixed the prices of both coal and electricity below the market rate to try to keep a lid on inflation. China relies on coal-fired power stations for more than 80pc of its electricity generation.
Yesterday, the government raised the price paid by the state-run power grid for electricity by 5pc. It was the second time in a month that the government has upped prices to encourage loss-making generators to bring their plant back online. It insisted, however, that consumers would not see electricity price rises.
Last month, China set up a National Energy Administration (NEA) in order to mastermind an electricity strategy, while a high-level task force was set up earlier this week to negotiate the tricky path between securing energy supplies and avoiding faster inflation.
Zhang Guobao, head of the NEA, said the task force would concentrate on ways of getting more coal to generators and to encourage energy conservation. “The demand for power is growing more quickly than the supply of coal. There is a lack of coal,” he said.
The government has forecast a shortfall of 2pc and was only able to guarantee constant electricity for Shanghai and Beijing. Ting Lu, an economist at Merrill Lynch, predicted that more price rises would have to come for both electricity and petrol before the year is out. Fuel prices were raised by 18pc two months ago.
In the northern province of Shanxi, the population of almost 34m people is having to contend with regular blackouts and the local administration has forecast a five gigawatt shortage this summer and put its industry on strict rations.
Why am I not surprised that once again Barack Obama has no idea what the hell he’s talking about?
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