The BIG threat to China's growth story

Image: dead fish is seen as fishermen collect remaining fish at the partially dried-up Guihu Lake.
Photographs: Reuters.

China's fast paced growth could hit a speed breaker soon. The country's economic growth is likely to slow down as a result of a severe power crisis and a drought.

The power generation in the country has not kept pace with the boom in industrial and manufacturing growth.

Coal-based power plants contributed 84 per cent of China's electricity in April, while hydroelectric power dropped to 11 per cent from 16 per cent in 2009.

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The BIG threat to China's growth story

Image: A labourer builds components of wind turbines at a wind power equipment factory in Zouping.

Water shortage has led to a significant drop in hydroelectric power generation resulting in power failures across China.

China's main industrial bases in the east and south have been affected.

China's state-owned power distributor, The State Grid said that 10 of its provincial-level power grids were suffering severe shortages.

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The BIG threat to China's growth story

Image: A truck carrying a man drives past electricity wires near a coal-fired power plant.
Photographs: Jason Lee/Reuters.

China could face an electricity shortage of 30 gigawatts, the worst power crisis since 2004. China usually bears the brunt of a power shortage from June to September.

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The BIG threat to China's growth story

Image: Workers work on a set of solar panels on the rooftop of the Nanjing South Railway Station Nanjing.
Photographs: Sean Yong/Reuters.

The Yangtze river, which is the lifeline of China, is facing the worst drought in five decades.

About 400 million people and 40 per cent of China's economic output depends on the Yangtze delta.

The BIG threat to China's growth story

Image: A worker collects dried grass near a power plant in Hefei, Anhui province.
Photographs: Reuters.

China plans to stop diesel exports to ensure domestic supply as electricity outages continue unabated, according to the China Daily.

As hydroelectric power generation has suffered due to water scarcity, the government plans to import more gas for power producers.

The BIG threat to China's growth story

Image: worker repairs an utility pole on the outskirts of Yingtan.
Photographs: Reuters.

With drastic changes in China's climatic conditions, industry and households started facing power cuts from March this year.

The BIG threat to China's growth story

Image: A chimney billows smoke from a coal-burning power station behind a workman riding a bicycle.
Photographs: David Gray/Reuters.

In the second quarter, China's industrial output is likely to fall by one percentage point to 14 per cent, while GDP will fall to 9.7 per cent.

China's main power plants are also facing major losses.

The BIG threat to China's growth story

Image: Chimneys and buildings are seen through thick steam at Taiyanggong Gas-fired Thermal Power Station.
Photographs: Petar Kujundzic/Reuters.

In April, China's industrial output saw a slowdown. It grew at 13.4 per cent compared to 14.8 per cent in the previous year.

The BIG threat to China's growth story

Image: Operations of Mang Wang Coal Mine, which was taken over by Xishan Coal Electricity Group Ltd in 2009
Photographs: Fayen Wong/Reuters.

The power shortage has badly hit provinces like Zhejiang, Hunan, Anhui, Jiangsu, Hubei, Sichuan and Henan.

The BIG threat to China's growth story

Image: Employees work on circuit boards at a workshop of an energy-saving lighting device factory.
Photographs: Reuters.

The power shortage is also likely to push up China's inflation which stands at 5 per cent.

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