China increases power cuts, 'scared' suppliers look to leave country
Regular power outages decided on by the Chinese government to save electricity, now look permanent -- and technology manufacturers say they are being scared into moving to different countries.
Tim Cook visiting China production
Since June, China's government has been forcing companies to shut down at times to save electricity. Now firms say they get weekly notifications of which days they will have no power, and fears that this is permanent are reviving aims to move away.
According to Nikkei Asia, the situation is being exacerbated because there is no clear pattern to which companies are being affected.
"It is very chaotic and confusing," an unnamed executive at an Apple supplier told the publication. "Some suppliers managed to secure power supplies based on their friendly relations and negotiations with the local governments, while some were affected badly."
Companies spared reportedly include iPhone assembler Luxshare, according to unspecified sources. Some other Apple suppliers believe that there is a logic to how the local government is determining who gets power, and who loses it.
"If you don't bring as much value as, say, displays or high-end semiconductors but consume a lot of energy, sorry you are out!" said an executive in a company that provides Apple with printed circuit boards. "It's better that you just shut down and move away."
The concerns over power supplies come as firms in the region say they are now also worried about operating in China.
"It's not just about power issues," said an unnamed iPhone supplier. "From [the disappearance of] Jack Ma to the crackdowns on gaming and education ... these all suggest increasing uncertainty for enterprises operating in China. People are scared."
Jack Ma runs Alibaba, a firm whose technology products in cloud computing reach almost 800 million users. Always outspoken, he criticized the Chinese banking system in a speech in November 2020 -- and was then not seen again in public for about three months.
These concerns, and a presumption that power outages will continue, is reportedly prompting companies to reconsider their Chinese operations.
"We heard that the situation could last till the end of this year or even longer," an executive from a speaker supplier told Nikkei Asia. It's not known if the unnamed executive's company supplies Apple, but it does sell to Amazon, Lenovo and others.
"Such inconvenience could be gradually unbearable," the executive said. "Now we are again reopening our evaluations of overseas plants, perhaps in Vietnam, Batam in Indonesia, or Thailand."
Apple and other technology firms have long been either considering or implementing plans to move production away from China. It's chiefly been because of fears of over-reliance on one source, but there have also been issues over US/China trade tensions.
Read on AppleInsider
Tim Cook visiting China production
Since June, China's government has been forcing companies to shut down at times to save electricity. Now firms say they get weekly notifications of which days they will have no power, and fears that this is permanent are reviving aims to move away.
According to Nikkei Asia, the situation is being exacerbated because there is no clear pattern to which companies are being affected.
"It is very chaotic and confusing," an unnamed executive at an Apple supplier told the publication. "Some suppliers managed to secure power supplies based on their friendly relations and negotiations with the local governments, while some were affected badly."
Companies spared reportedly include iPhone assembler Luxshare, according to unspecified sources. Some other Apple suppliers believe that there is a logic to how the local government is determining who gets power, and who loses it.
"If you don't bring as much value as, say, displays or high-end semiconductors but consume a lot of energy, sorry you are out!" said an executive in a company that provides Apple with printed circuit boards. "It's better that you just shut down and move away."
The concerns over power supplies come as firms in the region say they are now also worried about operating in China.
"It's not just about power issues," said an unnamed iPhone supplier. "From [the disappearance of] Jack Ma to the crackdowns on gaming and education ... these all suggest increasing uncertainty for enterprises operating in China. People are scared."
Jack Ma runs Alibaba, a firm whose technology products in cloud computing reach almost 800 million users. Always outspoken, he criticized the Chinese banking system in a speech in November 2020 -- and was then not seen again in public for about three months.
These concerns, and a presumption that power outages will continue, is reportedly prompting companies to reconsider their Chinese operations.
"We heard that the situation could last till the end of this year or even longer," an executive from a speaker supplier told Nikkei Asia. It's not known if the unnamed executive's company supplies Apple, but it does sell to Amazon, Lenovo and others.
"Such inconvenience could be gradually unbearable," the executive said. "Now we are again reopening our evaluations of overseas plants, perhaps in Vietnam, Batam in Indonesia, or Thailand."
Apple and other technology firms have long been either considering or implementing plans to move production away from China. It's chiefly been because of fears of over-reliance on one source, but there have also been issues over US/China trade tensions.
Read on AppleInsider
Comments
By the way, has anyone noticed how the above photo looks photoshopped around the girl's teeth and lips? Can anyone analyze the pixels? If you look at her chin, there is a blur between her chin and Cook's shirt, but there is no such blur between her lips/teeth and the same shirt. What kind of camera can do that?
If you thought they had photoshopped a smile onto her otherwise miserable face due to Apple's wretched working conditions while Tim Cook maniacally laughs at her, you need to bone up on your detective skills MacGyver.
I agree!
https://syncretica.substack.com/p/rectification-campaign-to-energy
Rectification Campaign to Energy Crunch
How Chinese politics is leading to a chilly winter in Europe
Energy markets are a hot topic now with gas prices going vertical in Europe and coal prices breaking all time highs. There have been numerous hypotheses lodged online blaming some very plausible causes including reduced gas storage and nuclear and some where the causal link appears to be missing, like renewables. Renewables are variable, but without them Europe would undoubtedly need more gas and be in more strife.
Over the last year I’ve been working on a project with ANU on China’s coal markets and logistics and how domestic drivers lead to massive changes in imports. This focus has perhaps given me a different lens to look through recent energy market developments that I will briefly present here.
China’s energy markets and global markets, especially for LNG and pipeline gas have become increasingly integrated over the last five years.
...
By mid to late 2020, coal was looking to be in serious trouble. Chinese inventories were high and shipping data showed that much of the supply of coal to southern China was now coming from Northern China ports squeezing leaving little room for thermal coal imports and not just from Australia which was singled out for special treatment. Then something strange happened.
There is however another possible reason. During this period there was something of an anticorruption crackdown in Inner Mongolia which borders Mongolia. Decisions on mine approvals and the like are invariably contentious, especially during a period where the government is talking about greening the economy and commodity imports are often a source of graft. This article in Guancha may provide the answer.
You can run that via google translate, but circa March of this year Xi was making explicit reference to anticorruption measures around the coal sector in Inner Mongolia. The collapse in imports and production over this period likely led to a shortage of approximately 30MT attributable to lost production and another 12MT from Mongolian imports. If you look at global seaborne coal imports, that is about two months of global imports, including China.
In gas equivalent terms, we know China takes about 330kg of coal per MWh of power, and a Combined Cycle Gas Turbine uses around 7GJ of gas per MWh. All in you are looking at bump in LNG demand to fill this hole equal to 5% of *annual* gas demand in Europe per IEA data.
What can or should we take away from this?
Firstly that global energy markets are tightly coupled now via fossil fuels. Expansions in LNG infrastructure and pipelines mean that regional prices should, in general be more tightly correlated.
European gas demand is falling but varies with renewable generation and weather. More storage of gas but also pumped hydro and nuclear will be required.
China is so big that seemingly obscure provincial corruption crackdowns in key areas can roil energy markets.
China does not seem to be stepping back from mass campaigns and the like any time soon.
The cost of fossil fuels is not just emissions but also in exposure to this volatility - if the energy transition seems expensive, remember that heating your home this winter in Northern Europe means you are paying a premium for China’s institutional and political volatility.
Steel production is likely the largest component of industrial energy use, and as a major component of China's economy is driven by infrastructure growth, it is unlikely to be reduced by much.
China shot itself in the foot by "boycotting" Australian coal, a result of broken diplomacy between the two. I would put this blunder squarely on Xi Xinping.
Also, you've enjoyed the fruits of socialism since before you were born.
Better question - what makes you think we can separate human error from humanity? Lots of things would be ideal if human error wasn't a factor. But that's not the world we live in. IRL, human error is a factor.
If this were a game of Civ, I’d say everyone is in a dark age at once.
"Failure is not an option".