Why does China’s “cutting the switch and curtailing power” cause global pain?

China’s last large-scale power rationing was probably around 2003-2004. At that time, more than 20 provinces and municipalities in the country issued power rationing, which also had a certain impact on production at that time.

In fact, since the power shortage in 2004, we have ushered in a climax of power generation investment. As of 2019, the country’s full-caliber power generation installed capacity exceeded 2 billion kilowatts, ranking first in the world. In fact, there is no risk of power shortage. .

Why does China’s “cutting the switch and curtailing power” cause global pain?

But I never thought that in 2021, we will start to “turn off the power supply” again, so why we, who clearly have no risk of power shortage, will “turn off the power supply”? This is a long story, in simple terms It is caused by the integration of energy structure, economic situation, environmental protection policy and other reasons.

Judging from the current situation, compared with 2004, the power shortage in China this time has caused global pain.

Why do you say that? In fact, the reason is very simple. On the one hand, under the current epidemic situation, only China is very well controlled, so global orders come to China like snow flakes.

Sudden power cuts in China have temporarily suspended production in some factories to a certain extent, causing production capacity to be affected. The relationship between market supply and demand is determined. Once production capacity cannot keep up, prices will rise.

According to agency data, China’s producer price index has seen its largest increase since 1996, which has led to an increase in export prices.

Secondly, China is also a global manufacturing plant. Many manufacturers around the world have established their foundries in China, and they also purchase a large number of components from the Chinese supply chain.

After the power cut, the production of the foundry was affected, and the suppliers were also affected. Take Apple as an example. The delivery date of the iPhone 13 this time hit a record high. Now I buy the iPhone 13 Pro and the delivery cycle is more than one month. This is a double effect. The result of the next.

Korean media also reported that due to power curtailment, China has suspended the operation of some raw material production plants, and many of the raw materials used by the Korean semiconductor industry are supplied by China, which has caused the production of Samsung, SK Hynix and other manufacturers. Also caught in a predicament.

In fact, in today’s global supply chain integration, global manufacturers are all linked. For a global manufacturing center like China, any disturbance will have a huge impact on the world. This time we accidentally sneezed. , Pulled the switch to limit the electricity, unfortunately, the whole world was in pain, and it was also deeply moved.