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China's Ongoing Energy Shortage Saga
Jang.com ^ | July 21, 2004 | Jang.com

Posted on 07/21/2004 2:18:44 PM PDT by Migraine

China's energy, transport shortages to worsen (Updated at 1925 PST)

SHANGHAI: Drastic power shortages in China are set to worsen as the creaking rail network struggles to deliver coal to plants scrambling to meet the country's insatiable appetite for energy, officials said Wednesday.

"We still see no change in sight or things getting better in this regard," Ma Liqiang, a ranking official of the National Development and Reform Commission, told the China Daily.

"The supply is still tight," Ma said.

China is in the midst of an electricity crisis as its booming economy creates massive demand that could result in the worst power shortfall since the 1980s.

Despite government efforts to address the problem shortages will only worsen this year, Ma said. Twenty-four Chinese provinces and regions, including booming Shanghai, have been forced to restrict electricity usage, as a gap between supply and demand widened to 20 million kilowatts in the second quarter of this year.

Ma forecast the shortage would widen to 30 million kilowatts over the peak summer months, with one third of Chinese state-owned coalmines already fighting to meet production targets, Ma said.

With summer in full swing, the third quarter will see a further rise in demand for oil, coal and electricity, said Ma, adding that the nation's creaking transportation network, in particular, was under considerable stress.

With coal, grain, oil and fertilizer getting priority treatment for transport, huge bottlenecks for other goods were being created. Currently the railway system is only able to meet about 35 percent of transportation demands, despite the use of the country's entire fleet of locomotives, Ma said.

Although demand for rail cars has surged to 300,000 this year, China's rail system can handle fewer than 100,000 cars per day, the newspaper said, citing official statistics.

To relieve the overloaded system and boost coal supplies at major power plants, the government planned to add 6,800 extra freight cars between July 19 and August 7, the Ministry of Railways said on its website.

The ministry said 5,000 of the cars would be dedicated to transporting six million tonnes of coal over the 20-day period to ensure power plants have 15 days of reserves.

Chinese power plants have been on the verge of running out of coal as a result of massive transport bottlenecks and surging demand for power.

The government has implemented measures aimed at cooling the economy, which grew 9.7 percent in the first half, but energy demand from power-hungry car and steel factories has yet to ease.

"Most urgent among all of the economic objectives is to cool down industries which need lot of electricity," the Securities Times quoted Zhu Hongren, deputy general director of the Economic Operation Bureau, as saying.

"This is a continuing effort to address the problem of over-investment in some sectors," Zhu said.


TOPICS: Extended News; News/Current Events
KEYWORDS: china; energy; infrastructure; weaklink

1 posted on 07/21/2004 2:18:47 PM PDT by Migraine
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To: Migraine
China should start a crash nuclear energy program.

Set the example for the world.

Use some of that trade surplus from the US for infrastructure rather than military.

The people will demand more energy and the communist system will collapse from within.

China's economy is a runaway train that can't be stopped!

2 posted on 07/21/2004 2:22:26 PM PDT by CROSSHIGHWAYMAN (I don't believe anything a Democrat says. Bill Clinton set the standard!)
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To: Migraine
This story has been ongoing, but in the past, the crisis has focused on petroleum supplies. This quote summarizes the problem, in more ways than one:

"This is a continuing effort to address the problem of over-investment in some sectors," Zhu said.

Zhu said. They still don't get it. It's the government management, stupid. Hey, it's not overinvestment if the stuff you make is selling like hotcakes; it's lack of incentive for any entity to go out and build the infrastructure.

3 posted on 07/21/2004 2:22:27 PM PDT by Migraine
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To: CROSSHIGHWAYMAN

They have one plant at Daya Bay. It is on the coast about 100 miles from Hong Kong. I don't know if it was ever finished.


4 posted on 07/21/2004 2:25:24 PM PDT by Fellow Traveler
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To: CROSSHIGHWAYMAN
You are right on. It's pretty exciting what has happened there. Who knows what happens when the people rise up (reminds me of Les Miz:
"Damn their warnings, damn their lies; they will see the people rise!"
5 posted on 07/21/2004 2:26:10 PM PDT by Migraine
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To: Migraine

Wait till gasoline hits $4/gal. here because China is buying up all the petroleum they can gobble.

Lumber is at an all-time high, as is concrete and steel. Building a house now costs about $3000 - $4000 more just for raw materials compared to last year.


6 posted on 07/21/2004 2:27:14 PM PDT by AK2KX
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To: Migraine
China is in the midst of an electricity crisis as its booming economy creates massive demand that could result in the worst power shortfall since the 1980s.

All of which can be laid square on the doorstep of China's centeral -- and centeralized (a.k.a. "planned economy") -- government.

7 posted on 07/21/2004 2:31:26 PM PDT by yankeedame ("Born with the gift of laughter & a sense that the world was mad.")
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To: AK2KX
Wait till gasoline hits $4/gal. here because China is buying up all the petroleum they can gobble pay for.

Which will drive up the price of petrol which will cause more and more oil to hit the market by producers hoping to cash in on the $$$. This, in turn will serve to drive down the price of oil. The free market works -- if it's allowed to.

Forty dollars a barrel for oil today is nothing. (And why is $40 supposed to be some kind of tigger?)Back in the mid 1970 oils was $35 a barrel....which in today's money would be nearly $130 a barrel!! As for as gasoline at the pump, back in 1970's gas was $1.35 a gallon...which in today's money would be nearly $5.20 per gallon!!

Lumber is at an all-time high, as is concrete and steel. Building a house now costs about $3000 - $4000 more just for raw materials compared to last year.

I dare say lumber, concrete and steel were at an all time high in 1964, 1981 and 1912 as well. Food today is at an all time high, but so what?

History is inflationary.

For example, food todays costs more in dollars and cents than ever before. But as the % of household income it is much lower.Back in the late 1960's something like 18% of household income was spent on a market basket of food. In 2003 this same market basket took up only a little over 13% (something like 13.2%)

Sure, concrete, etc. cost more today when talking strictly in ever inflating dollars and cents. In constant dollars how much as it gone up? As a percentage of the actual cost of the structure has it gone up? Compared to say 1971 or 1917?

8 posted on 07/21/2004 2:54:35 PM PDT by yankeedame ("Born with the gift of laughter & a sense that the world was mad.")
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To: yankeedame

I was referring to the recent sharp increase in building material costs. Where a year ago you could get 2x4x8 studs for $1.30, they are now $3.47. Steel studs used to be $0.95, now they're around $2.00.

Sharply rising demand in China is fueling this increase.

Interestingly I just read an article in the Saturday Evening Post from 1938 which commented on the drastic increases in scrap metal recycling due to rising prices. Two countries were driving that demand:

Japan and Germany.


9 posted on 07/21/2004 3:54:02 PM PDT by AK2KX
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To: Migraine
China is also running out of water. Yes, I know they have floods, but the water they have is in the wrong places.
10 posted on 07/21/2004 6:09:12 PM PDT by Malesherbes
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