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China has ordered coal miners in the country to boost production urgently as the energy crisis threatens factories across the world’s second-biggest economy and forces the administration of President Xi Jinping to backtrack on climate change promises.
The latest effort by Chinese authorities to combat acute power shortages comes after high-tech manufacturing factories were forced to halt or reduce operations, power cuts affected homes in parts of north-east China and warnings were issued that critical industries such as food production could also be hit.
Tight gas supplies and volatile commodity prices have also strained energy markets in Europe, the UK and India, drawing interventions from Russian president Vladimir Putin and US energy secretary Jennifer Granholm.
China’s domestic coal production reached 3.9bn tonnes last year and is now forecast to rise in 2021, despite Xi winning international praise ahead of next month’s COP26 climate conference in Glasgow for promising that China would hit peak carbon emissions before 2030 and achieve carbon neutrality by 2060.
Gavin Thompson, an Asia-Pacific commodities expert at research consultancy Wood Mackenzie, said in a note to clients earlier today.
“This looks uncomfortable as China prepares for [international climate conference] COP26 and comes just weeks after President Xi announced that China will no longer build coal plants overseas. But the short-term reality is that China and many others have little choice but to increase coal consumption to meet power demand.”
Read more
Robert Armstrong The absolutely bonkers rise in UK natural gas prices and liquid natural gas in Asia overshadow the merely staggering doubling of Chinese coal and US natural gas prices. Read more in today’s Unhedged.
Gillian Tett Nuclear power can help fill the gaps in a tricky energy transition and ESG funds should reconsider their exclusion of the technology if we are to reduce our carbon emissions.
Are you experiencing higher fuel prices? Email your thoughts to me at gordon.smith@ft.com. Thanks for reading and here’s the rest of today’s news — Gordon
Five more stories in the news
1. Senate votes to raise US debt limit until December Democratic and Republican leaders on Capitol Hill have reached an agreement to extend the debt ceiling to December 3, providing short-term relief to investors and executives who had fretted about a possible government default this month.
2. Ireland signs up to global corporate tax deal Ireland is to abandon its cherished low corporate tax rate and replace it with a higher, internationally agreed charge. In the past Ireland has lured international companies, including tech giants Apple, Google, Amazon and Facebook, to its shores with promises of lower corporation taxes. The change is expected to cost the country €2bn a year in lost revenues.
3. Musk says Tesla will move HQ to Texas Tesla is moving its headquarters from California to Texas, chief executive Elon Musk said in off-the-cuff comments after the electric car company’s annual shareholder meeting in Austin. The billionaire caused controversy last year when during the depths of coronavirus he called California’s shelter-in-place orders “fascist”.
4. US special forces secretly train Taiwan’s military The Pentagon has been sending special operations forces to Taiwan for several years to help the country prepare for a possible Chinese attack, according to people familiar with the deployments.
5. Journalists win Nobel Peace Prize Philippines journalist Maria Ressa and Dmitry Muratov from Russia have been awarded this year’s Nobel Peace Prize. The Nobel Committee said the award was given to the two for their “courageous fight for freedom of expression in the Philippines and in Russia”.
Coronavirus digest
A record number of small US businesses say they cannot find enough qualified workers, adding to signs that labour shortages are holding back the recovery.
After more than 18 months of relentless virus elimination regimes, governments across Asia-Pacific are to beginning to ease restrictions on domestic movement and social distancing as well as border controls.
The UK has slashed its travel “red list” from 54 to seven destinations from which returning travellers must go into hotel quarantine.
When future historians look back, how will the knock-on, indirect and half-hidden costs of Covid-19 compare with the direct effects of the disease?
The days ahead
Economic data The pace of US jobs growth rebounded sharply in September, new data today is expected to show. The alarming spread of the Delta coronavirus variant deterred hiring in August.
US-Mexico security meeting A group of top US officials will travel to Mexico City today to try to revitalise the two countries’ bilateral security relationship.
IMF meeting The 24 board members of the IMF meet today to decide whether the fund’s managing director, Kristalina Georgieva, should retain their backing. Georgieva has been accused of unethical behaviour in her previous job at the World Bank.
What else we’re reading
Post-pandemic recovery may prove more complicated than it looks A bad news pile-up makes it hard to understand precisely where we are, writes John Plender. Volatility and insecurity have cast a dismal spell over global markets since the S&P 500 index peaked on September 2, he adds.
The US right’s love affair with Hungary’s leader US conservatives used to admire Viktor Orban from a distance. Now they want to emulate him close up, writes Edward Luce. The reasons for Orban’s ascent in the eyes of Republicans offer a road map on how the party plans to return to power.
Return of the renters Tenants in world cities such as London and New York are finding the deluge of discounted properties that hit the market during the first coronavirus lockdowns is fast drying up — and the scramble for rental homes is back.
The hidden costs of cost-benefit analysis Every economist has their own list of pros and cons, although the hope is to be a little more systematic. Tim Harford asks, what is the point if all the costs and benefits being analysed are flights of fantasy?
Catching billionaire lottery fever National lotteries have been around for so long that someone scooping a lot of money against high odds is no longer a novelty. Whether it makes any greater financial sense to buy a ticket is dubious. But record-breaking payouts have been engineered by reducing the chances to near zero. This has not put people off.
Music
Can the music industry clean up its act? For decades, a culture of sexual abuse has been ignored. Helen Brown asks whether the conviction of R Kelly, who was found guilty of using his superstar status to sexually abuse women and children, is a turning point.
Source: Economy - ft.com
