China's Sichuan and Chongqing Plan Indefinite Extension of Power Outage

[Photo by Xinhua News Agency]

[Asia Economy Reporter Park Byung-hee] Following Sichuan Province, Chongqing City has also extended the deadline for planned power outages. Given the significant share of electric vehicles, semiconductors, and batteries in China's manufacturing sector held by Sichuan Province and Chongqing City, this is expected to have considerable repercussions not only in China but also on the global economy.

According to Nikkei Asia on the 25th, Chongqing City announced the indefinite extension of the planned power outages imposed on manufacturing factories the previous day.

Chongqing City began implementing planned power outages on the 15th due to power shortages caused by a heatwave. The planned outages were scheduled to end on this day if the heatwave subsided, but with temperatures exceeding 40 degrees Celsius, the outages were instead extended.

Chongqing City stated that the planned power outages will continue without a specified deadline until further notice. A Chongqing official explained that the deadline was not set to avoid giving companies excessive expectations.

Neighboring Sichuan Province also extended the deadline for planned power outages. Previously, Sichuan Province had extended the deadline once from the 20th to the 25th and now announced an additional extension until the 27th.

Nikkei reported that Honda and Isuzu automobile factories are located in Chongqing City. Chongqing is not only a hub for automobile parts manufacturers but also hosts many Taiwanese computer assembly companies. South Korea's SK Hynix also operates a packaging plant in Chongqing City.

The reason Sichuan Province and Chongqing City are implementing planned power outages is that the Yangtze River's water level has dropped due to the severe heatwave, reducing power supply. According to Bloomberg, the current water level of the Yangtze River is the lowest since records began in 1865.

Sichuan Province relies on hydropower for 80% of its electricity, but current hydropower generation has been cut in half. Chongqing City receives 15% of its consumed power from Sichuan Province, so it is also suffering a joint impact. However, since Chongqing's fossil fuel power generation accounts for 70%, it is expected to mitigate damage through coal power generation in the worst-case scenario.

This content was produced with the assistance of AI translation services.