China’s Power Crunch to Fuel Christmas Price Increase of Up to 15 Percent in US, Economist Warns

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More than half of China’s provinces have issued local power restrictions since September. The resulting widespread power outages and cuts under Beijing’s new energy policies will likely fuel global inflation by 0.5 to 1 percent, and drive a price increase of 10 to 15 percent in the United States over the Christmas season on retailed goods imported from China, an economist has said.

Huang Jun, a Chinese economist who now lives in the United States, told The Epoch Times that the power outages in China will cut off one-third of the country’s production capacity. Huang was the former lead columnist for Chinese state-owned broadcaster CNTV and the former chief economist at China Enterprise Capital Union (CECU). He is now director of the Asian Real Estate Association in the United States.

Affected by China’s power outages and cuts, some of the U.S. retail goods could see prices 10 to 15 percent higher, since about 40 percent of products come from China. This price increase is expected in the two months before and after Christmas, Huang added.

The impact of China’s power crunch on the global supply chain, as estimated by Huang following a survey of China-based manufacturers, will mainly reflect on four industries: textiles; toys, stationery, and office supplies; computers and computer accessories; and machinery parts.

According to local reports, in the southern city of Dongguan in China’s Guangdong Province, factories have been receiving official notices, restricting their operations to between 1-3 days per week depending on the scale and priority of the factory’s work as defined by the authorities.

In Zhejiang Province, the authorities are strictly controlling the manufacturing capacity of textile printing and dyeing, and chemical fiber and plastic products in its cities, including Shaoxing, Huzhou, Jiaxing, and Wenzhou.

By Jenny Li

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