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The BIG threat to China's growth story

Last updated on: June 1, 2011 10:11 IST

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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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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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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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.

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.

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.

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.

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.