China Energy Cutbacks Slow Manufacturing

(Credit: Pixabay)

by | Sep 28, 2021

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(Credit: Pixabay)

An energy crunch in China has led to some factory closures, industries and their suppliers to cut back production and is threating to impact the global supply chain.

As China attempts to tackle its major emissions problem as well deal with the cost and supply of energy that much of the world is facing, it has cut back on power, especially in industry heavy areas. The Chinese government has shut down power completely to some locations and it appears will ration energy significantly across the country for the foreseeable future.

With major manufacturers like Apple, Telsa, Intel and Qualcomm using suppliers in the country the fear of significant industry slowdowns and supply chain impacts is growing.

Reuters reported several Apple and Telsa suppliers are suspending manufacturing for a few days to adjust to the power crunch as well as meet Chinese government demands on emissions. Apple supplier Unimicron Technology, for example, is closing three of its subsidiaries in China through Sept. 30, Reuters reported.

CNN reported that Pegatron, which makes components for Apple’s iPhone as well as assembles them, is cooperating with China’s energy policies and is reducing production. The manufacturer is located in eastern China.

The CNN report says while it is not known yet how hard supply chains will be hit by these shutdowns, they will at the least be slowed.

Eson Precision Engineering, which supplies parts for Apple and Telsa, told the Associated Press it would also be halting production at its factory in Kunshun through the end of the month but that it shouldn’t greatly impact production.

The New York Times says experts in the country think China will compensate for the energy crisis by limiting electricity to high-use industries like steel and aluminum and that could help fix the problem.

China uses the most energy in the world and has the highest carbon emissions. Most of the country’s electricity is produced by coal.

China President Xi Jinping recently told the UN General Assembly that country will attempt to hit peak carbon emissions before 2030 and be carbon neutral before 2060. He added China will not build any more coal-fired power plants.

The country may be facing additional current pressure regarding the power and sustainability problem as it is hosting an UN environmental conference by video Oct. 12-13.

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