Page 180 - 2023 White Paper on the Business Environment in China
P. 180
3 White Paper on the Business Environment in China
2.6 Resources and Industrial Materials
Key Take-Aways Energy Crisis
• China continues to be the world's biggest China has a robust system of power
producer and consumer of coal. Traditionally, it was generation, transmission, and storage, as well as
also a leading financer of coal-fired power plants well-developed water irrigation infrastructures
in developing countries. However, in 2021 China through constructing different water conservancy
pledged to stop funding new coal projects overseas, projects. It is also leading the world in developing
telling the UN General Assembly that China would new energies. But shortcomings were exposed
focus on helping developing economies embrace under rare and extreme conditions in 2022 that
low-carbon energy (Daniel Van Boom). China made alarmed people who are used to modern life
no overseas coal power investments in 2021 or the powered by large volumes of electricity and water.
first half of 2022. In the process of building a new power system,
the task of ensuring power supply is always
• Steel inventory is slowly piling up in the bottom line. However, with the increase in
warehouses as demand for steel in China falls amid abnormal weather phenomena, power supply
pandemic lockdowns and crippled construction may suffer greater risks. How the country is able to
activity. meet the huge amount of electricity consumption
has been an issue of concern, especially amid
Background efforts to promote green and low-carbon energy
transformation. In 2021, China's power generation
China plans to make the unimpeded and stable volume rose 8.1% year on year to 8,112.2 billion
operation of its industrial and supply chains a kWh, ranking first in the world. Nationally, South
top priority. The industrial sector is the backbone China's Guangdong Province is the largest power
and growth engine of the Chinese economy. generator in China, with an annual generation
The country has vowed incremental efforts in of 611.5 billion kWh, mainly relying on coal
policy implementation to ensure reasonable and nuclear power. However, Guangdong still
expansion in the industrial sector. 2022 official had the biggest electricity shortage among all
data showed slower growth in the profits of provincial regions in China because of its large-
China's major industrial firms as the Omicron scale industrial production and large population.
variant forced factories in metropolises like Eastern provinces such as Shandong and Jiangsu
Guangzhou, Shenzhen and other heavy-industry faced similar situations. Therefore, northern
regions to suspend production. From high-tech Chinese regions, such as Inner Mongolia, Shanxi,
semiconductors, auto parts, and electronics to Xinjiang and Ningxia, and southwestern provinces
textile and garment industries, factory activities like Sichuan and Yunnan exported the most
were disrupted across different fields. Logistics surplus power to more populous and developed
bottlenecks also emerged in the period. China has eastern regions, forming China's "west-to-
moved swiftly to smoothen transport and logistics east" power supply grid. Along the coast, from
and adopted a slew of measures, such as the Northeast China's Liaoning to South China's
"white list" approach, to help enterprises in virus- Hainan, 54 nuclear power units were in operation
hit regions resume production and guarantee the as of July 2022, the second-largest number in the
supply of essential parts, equipment and products world following the US. China's power generation
(Xinhua, China Prioritizes). has demonstrated resilience, given efficient
government mobilization capacity nationwide,
180
2.6 Resources and Industrial Materials
Key Take-Aways Energy Crisis
• China continues to be the world's biggest China has a robust system of power
producer and consumer of coal. Traditionally, it was generation, transmission, and storage, as well as
also a leading financer of coal-fired power plants well-developed water irrigation infrastructures
in developing countries. However, in 2021 China through constructing different water conservancy
pledged to stop funding new coal projects overseas, projects. It is also leading the world in developing
telling the UN General Assembly that China would new energies. But shortcomings were exposed
focus on helping developing economies embrace under rare and extreme conditions in 2022 that
low-carbon energy (Daniel Van Boom). China made alarmed people who are used to modern life
no overseas coal power investments in 2021 or the powered by large volumes of electricity and water.
first half of 2022. In the process of building a new power system,
the task of ensuring power supply is always
• Steel inventory is slowly piling up in the bottom line. However, with the increase in
warehouses as demand for steel in China falls amid abnormal weather phenomena, power supply
pandemic lockdowns and crippled construction may suffer greater risks. How the country is able to
activity. meet the huge amount of electricity consumption
has been an issue of concern, especially amid
Background efforts to promote green and low-carbon energy
transformation. In 2021, China's power generation
China plans to make the unimpeded and stable volume rose 8.1% year on year to 8,112.2 billion
operation of its industrial and supply chains a kWh, ranking first in the world. Nationally, South
top priority. The industrial sector is the backbone China's Guangdong Province is the largest power
and growth engine of the Chinese economy. generator in China, with an annual generation
The country has vowed incremental efforts in of 611.5 billion kWh, mainly relying on coal
policy implementation to ensure reasonable and nuclear power. However, Guangdong still
expansion in the industrial sector. 2022 official had the biggest electricity shortage among all
data showed slower growth in the profits of provincial regions in China because of its large-
China's major industrial firms as the Omicron scale industrial production and large population.
variant forced factories in metropolises like Eastern provinces such as Shandong and Jiangsu
Guangzhou, Shenzhen and other heavy-industry faced similar situations. Therefore, northern
regions to suspend production. From high-tech Chinese regions, such as Inner Mongolia, Shanxi,
semiconductors, auto parts, and electronics to Xinjiang and Ningxia, and southwestern provinces
textile and garment industries, factory activities like Sichuan and Yunnan exported the most
were disrupted across different fields. Logistics surplus power to more populous and developed
bottlenecks also emerged in the period. China has eastern regions, forming China's "west-to-
moved swiftly to smoothen transport and logistics east" power supply grid. Along the coast, from
and adopted a slew of measures, such as the Northeast China's Liaoning to South China's
"white list" approach, to help enterprises in virus- Hainan, 54 nuclear power units were in operation
hit regions resume production and guarantee the as of July 2022, the second-largest number in the
supply of essential parts, equipment and products world following the US. China's power generation
(Xinhua, China Prioritizes). has demonstrated resilience, given efficient
government mobilization capacity nationwide,
180
