China directs companies to temporarily halt production to meet energy consumption targets

In a major blow to China-based manufacturers of electronic equipment, firms were forced to temporarily halt production to help provinces meet their energy consumption targets.

According to a report by Nikkei Asia, a crackdown on energy consumption has affected approximately 160 energy-intensive companies, including electronics, textile, dyeing and chemical fibre industries. The report said that the recent decision to clamp down energy consumption came after the prices of coal and natural gases recorded a rapid surge in the last month. Apart from the price surge, the Communist government has decided to halt production to fulfil its commitment to reduce carbon emission.

The report claimed the production order issued for September 21-30 has affected a large number of companies, out of which 80% are in the Ma'an area. The change in the plan came at a time when the global markets were shaken by the debt crisis and the companies were pushing to meet the demands of the festive season.

Eson Precision Engineering, which supplies electronic parts to some of the biggest brands like iPhone and Tesla, suspended its production from Sunday until Friday in order to meet the energy targets. Nikkei Asia quoted a community official at the Ma'an area in Shaoxing city, as saying, "It is mainly for the provincial government's energy consumption control requirements."

Zhejiang government's five-year plan for high energy consumption companies

It is worth noting that China aims to reduce national energy consumption per unit of GDP by 13.5% from 2020 while cutting carbon emissions by 18%. In order to implement the policy on the ground level, the Communist government has asked local governments to take steps.

According to the media reports, Zhejiang's provincial government had issued a five-year plan for companies that require high energy consumption in May this year. It directed the textiles, dyeing and plastics companies to upgrade their technology and improve business efficiency in order to adhere to the climate change policy and the rising demands in the festive seasons.

(With inputs from ANI, Image: ANI/Representative)