China’s power consumption plunges as coronavirus pandemic shutters factories; economic numbers certain to plunge next
02/16/2020 // JD Heyes // Views

Several analysts have been keeping an eye on China’s internal economic activity as another way of gauging how severe the coronavirus spread really is and how drastic the government’s actions are to contain it.

Over the past few days, these analysts have been able to piece together a number of indicators suggesting that a) the spread of the virus is much more profound and widespread than the government in Beijing is saying; and b) mass quarantines and other actions aimed at controlling population movement are having such a significant negative impact on economic activity that the demand for power needed by factories and other business enterprises has fallen off dramatically.

As reported by The Epoch Times, industrial power demand in China this year could fall off by as much as 73 billion kilowatt towers, according to IHS Markit, due to fallout from the coronavirus that has prevented scores of workers from returning to their jobs.

The decline only accounts for about 1.5 percent of all industrial power consumption in China, the paper said. But because the country is so big and so heavily populated, a small drop-off in production like that is still more equal to the power consumption of small countries like Chile. Also, it shows just how vast the coronavirus spread has been and what an impact it really has had on the economy overall.

The Epoch Times notes further:

The reduction is the energy equivalent of about 30 million tonnes of thermal coal or about 9 million tonnes of liquefied natural gas (LNG), IHS said. The coal figure is more than China’s average monthly imports last year while the LNG figure is a little more than one month of imports, based on customs data.


The Communist government has attempted to curb the spread of the virus by extending the Lunar New Year holiday for an extra week, while encouraging more people to work from their homes. 

According to Xizhou Zhou, the global head of Power and Renewables at IHS Markit, in a more severe outbreak scenario in which, say, the pandemic extends past March, economic growth in China for the year 2020 will only be around 4.2 percent, down from a pre-outbreak forecast of 5.8 percent, which itself is a far cry from the days of double-digit annual growth in the 1990s and earlier this century. 

‘Operating below 10 percent’

Meanwhile, power consumption would only grow by about 3.1 percent, down from 4.1 percent. And remember, all of these declines represent a decline in economic activity and income for ordinary Chinese.

“The main uncertainty is still how fast the virus will be brought under control,” said Zhou, noting further that the impact on the power sector will be relatively modest from a full-year picture in 2020.

Regionally, the decline in power consumption and resultant economic activity has been much greater, especially in Hubei Province, the epicenter of the coronavirus outbreak. There, according to The Epoch Times citing published data, peak power loads averaged 21 percent less in January than anticipated.

“Utilization rates at plastic processors are between 30 percent and 60 percent and the low levels are expected to last for another two weeks, according to ICIS China,” said the news site, while noting further that weaving machines at textile plants are currently operating below 10 percent of their overall capacity.

Zero Hedge reported further that several indicators show that not only is Chinese power production and consumption off, but so, too, is travel and ordinary commerce. This is all going to lead to global supply chain shortages that analysts believe will be costly to the global economy.

And keep in mind, the virus hasn’t even begun to spread in the world’s No. 1 economy, the United States, though government health experts believe that it’s coming.

Keep up with the latest on the outbreak at

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