Tuesday, May 24, 2011

Offshoring in PRChina? Better Read This!


...China will impose punitive power prices on businesses that exceed consumption limits in Zhejiang province, a manufacturing hub bordering Shanghai, to curb demand during an expected electricity supply shortfall this summer.

China faces the worst power shortage in seven years as the economy grows faster than forecast and some utilities cut production or shut, hit by rising coal prices and government caps on tariffs. Zhejiang, on the eastern coast to the south of Shanghai, is host to companies including automaker Zhejiang Geely Holding Group Co., owner of Volvo Cars....

Seems that generating capacity is about 10% short of forecasted demand.

HT: Mish

1 comment:

J. Strupp said...


Instead of issuing punitive consumption limits on businesses, the PRC could simply raise interest rates and slow treasury purchases which will allow for the RMB to appreciate and, therefor, cool the Chinese economy to, say, 8% growth and none of this hocus pocus would be necessary.