China premier vows to ensure power supply for manufacturers

[FOSHAN] Chinese Premier Li Keqiang vowed to ensure power supplies for factories, in the Chinese government's latest effort to ease worries about the energy crisis roiling the world's manufacturing powerhouse.

China's No 2 official made the pledge on Thursday (Oct 14) during a visit to a Foshan factory run by home-appliance-maker Midea Group. He was in the southern manufacturing hub of Guangdong province to attend the China Import and Export Fair and later offered similar assurances to companies in a speech at the event.

"Midea is a big manufacturer. Manufacturers are important electricity users," Li told Midea representatives at the factory. "We require electricity providers to ensure electricity supplies to you because you are ensuring citizens' demand of daily goods."

Domestic and foreign companies alike have been urging China to minimise disruptions as authorities curb power supplies. China's official manufacturing purchasing managers' index contracted in September for the first time since the pandemic began, the latest sign of deceleration in the world's second-largest economy.

The National Development and Reform Commission said on Wednesday (Oct 13) it had secured supplies needed to heat homes and keep the economy running smoothly, but that high-energy-intensity industries would continue to face power curtailments. The government has also asked miners to boost coal supplies, and has given them permission to operate at full capacity even after hitting their annual quotas.

The country will allow electricity prices to rise by as much as 20 per cent against a benchmark, compared with a current cap of 10 per cent, the State Council - which is led by Li - said last week. Costs for the most energy-intensive industries could be brought in line with supply and demand without a cap, the council said.

"We have adequate tools in our toolbox to cope with such challenges, including the energy and electricity supply strains," Li told the trade fair on Thursday in Guangzhou. China can secure the electricity supply this winter and next spring, and ensure that businesses of all types get the power they need, he said.

BLOOMBERG