China’s energy crisis is beginning to hit people where they live, adding the risk of social instability to an economic slowdown and global supply chain disruptions.
Residents in several northern provinces have already been dealing with blackouts, while traffic lights being turned off are causing chaos on the roads in at least one major city. Guangdong, a southern industrial hub with an economy bigger than Australia’s, is asking people to use natural light in homes and limit air-conditioner use after implementing big power cuts to factories.
The impact to people’s homes shows how quickly the power crisis is escalating, as China typically first asks large industrial users to curtail consumption when supply gets tight. Economists at Nomura Holdings Ltd. and China International Capital Corp. have downgraded their growth forecasts for the economy due to the electricity shortages, and cuts to factories are raising concerns of yet another wrench thrown into the works of global supply chains.