Amid economic crisis, China faces major power outage; factory units shut down

The power outage in China has led to factories many shutting down. This may adversely affect the supply chain network.

Pic Credit: File Photo

New Delhi: Amid multiple economic challenges, China faces yet another flow as intense heatwaves have led to an acute power outage in  Southwest China. 

The power outage has forced many factories to shut down temporarily, which could further dent the supply chain network.

Chongqing municipality is home to a host of factories that produce automobiles and computers. But the local government has now ordered suspending production to conserve power. Similarly, factories in Sichuan province, also a manufacturing hub, have been shut down.

According to reports, the move will impact companies such as Foxconn Technology, Toyota Motor Corp, Volkswagen and Tesla`s battery supplier CATL among others. While several provinces are in the grip of a heatwave, there are others which have been swept by floods.

Xi Jinping in Crisis

This will further impact the economy at a time when the 69-year-old Chinese President Xi Jinping, is hoping to extend his tenure by another five years at the 20th national congress meet slated for October-November. "Though Xi will remain in power, as anticipated, there are voices of dissent," an analyst who has worked in China told India Narrative.

Xi however said that the Chinese machinery will now be directed to churn data which would reflect a situation that is not as gloomy.

The national congress meet of the Communist Party is held every five years where major decisions and leadership changes are announced. The 20th Party Congress, held in Beijing in the second half of 2022, is expected to see new faces promoted to senior positions and mark the start of President Xi Jinping`s unprecedented third term in power.

"The shutdowns add to challenges for the ruling Communist Party as Xi, the country`s most powerful leader in decades, prepares to try to break with tradition and award himself a third five-year term as a leader at a meeting in October or November," news agency AP reported.

Xi`s persistence with the zero Covid policy has already come under the spotlight. The National Bureau of Statistics (NBS) data revealed that the country`s urban youth unemployment rate touched 19.9 per cent in July-- the highest since January 2018 when record keeping of the same was launched.