Drought forces China to ration energy and close factories

BEIJING (AP) — Factories in southwest China have closed after dams used to generate hydroelectric power were left without enough water due to a worsening drought, a new economic turmoil as President Xi Jinping prepares to ground to prolong his mandate.

Several firms in Sichuan province, including manufacturers of solar panels, cement and fertilizers, have closed or reduced production after being ordered to ration power for up to five days, media reported on Wednesday. The water level in the reservoirs had dropped while the demand for energy for air conditioning increased due to the scorching temperatures.

“Leave the energy for the people,” read a provincial government order dated Tuesday.

The closures added to the challenges for the Communist Party as Xi, the country’s most powerful leader in decades, prepared to try to break tradition and give himself a third five-year term as leader at a meeting in October or November.

Growth in factory output and retail sales weakened in July, a setback to China’s economic recovery after lockdowns in Shanghai and other industrial hubs in late March to combat virus outbreaks.

The economy grew just 2.5% from a year earlier in the first half of 2022, less than half the official annual target of 5.5%.

Parts of central and northern China took emergency measures to secure drinking water supplies, as it had rained half as much as normal in summer. The official Xinhua news agency said water had been brought by fire trucks to two waterless towns near Chongqing in the southwest.

Hundreds of thousands of hectares (acres) of crops in central and northern China have withered due to lack of water and high temperatures, according to the government. Some areas have given up on the summer harvest.

The weather agency has warned that the temperature could reach 40 degrees Celsius (104 Fahrenheit) in some areas.

In Sichuan, home to 94 million people, the water in dams has fallen by nearly half this month, according to the Sichuan Provincial Department of Economy and Information Technology.

A subsidiary of Guoguang Co., Ltd. that produces pesticides and fertilizers has been closed since Monday and at least until Saturday, according to a company announcement filed on the Shenzhen Stock Exchange.

Several solar power equipment manufacturers in Sichuan, including Tongwei Solar Co. Ltd. and GCL-Poly Energy Holdings Ltd., said they had received notices to ration power.

Tongwei said “the power outage and production shutdown have not had much of an impact,” according to business outlet East Money.

China faced similar problems last year when the southeastern province of Guangdong, one of the world’s major manufacturing hubs, ordered factories to close because poor rains had exhausted hydroelectric dams.

The government has allocated 280 million yuan ($41 million) for drought relief in Hebei and Shanxi provinces and the northern Inner Mongolia region and northeastern Liaoning province, according to Xinhua.

“Some small and medium-sized rivers are so dry that they have stopped flowing,” the report said.

Meanwhile, authorities on Tuesday warned that parts of the country were at risk of flooding as heavy rains were forecast from the northwest, into Inner Mongolia and as far north as the northeast.

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