EconoChina

A blog on Chinese economy & society

Electricity usage expected to plummet in H2

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I think by now it’s pretty much consensus that China is going to slow down in H2 this year. However, most of the forecasts are  either pretty benign or belong to the “sky’s falling” category. The 21st Century Business Herald had an interview with the association of China’s power plants which expects dramatic fall in electricity usage in H2. Since about 70% of China’s electricity goes towards industrial production, analysts have long use it as a proxy for economic growth.

While the association recored 21.6% growth in H1, it now expects only 5% (!!!) growth in H2. Of course, a major factor behind low growth in H2 is simply higher base for comparison, as the Chinese stimulus only started to show results in H2/09.  The government’s drive to weed out less energy efficient companies is also expected to bear fruit in H2 this year, further depressing electricity demand. But still, the cliff-diving is dramatic to say the least.

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Written by Cindy Luk

August 4, 2010 at 4:03 am

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