Christmas is complicated for Santa Claus, and the fault is not yours. The chip shortage affecting the electronics world could worsen after the Chinese government’s decision to cut its energy bill.
The Asian giant wants to be more efficient, and has intermittently cut the power in factories and residential areas. The impact is notable for workers and residents of these areas, but it can also be global if these cuts severely reduce Chinese production capacity.
We want China to pollute less, but we keep asking for chips like there’s no tomorrow
In China, these measures have been taken to prevent factories, for example, from exceeding the consumption limits that Beijing imposed to promote energy efficiency. According to experts in economics and the environment, manufacturers have consumed their energy quota faster than they had anticipated, especially due to the explosion in demand after the pandemic.
As noted in AP News, the situation is a challenge for the Chinese Communist Party, which sought to reduce the emission of polluting gases but is facing one of the most difficult times for that huge amount of chip and product requests in all kinds of industries.
The impact of these measures is enormous for the Chinese economy: the economic growth forecast has dropped from 5.1% (the previous estimate) to 4.7% Over the previous year. These cuts could also add to the impact that the crisis is having on its huge real estate group, Evergrande Group, which could follow the path of Lehman Brothers and has posed many difficulties on world stock markets.
To these global effects are added the immediate effects for the Chinese population. In the northeast of the country, temperatures are already beginning to drop, and these cuts prevent them from turning on the heating.
Xi Jingping seems determined to get the world to see that his nation – the world’s most polluting nation – is working hard to cut emissions. Not only that: the Winter Olympics are held next February in Beijing, and the Chinese rulers they want to try to get clear blue skies for the event.
However, this decision endangers the production of all kinds of products. A clear example is Apple, and one of its partners in the production of its iPhones, the Chinese company Esos Precision Engineering Co. Ltd. indicated this Sunday that it would have to stop production in one of its factories for days, although the suspension, they assured, would not have “a significant impact “on its operations. It now remains to be seen the extent of these power outages and the Collateral damage that they produce both locally in China and in the rest of the world.
Via | AP News