China’s power crunch pushes foreign businesses to invest in factories elsewhere

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• In the last several days, many local Chinese governments have restricted power usage, limiting or even halting factory production.
  
• “Some companies were on the fence about investing in China. They choose to not go ahead now,” said Johan Annell, partner at consulting firm Asia Perspective, noting these planned foreign business investments were in the tens of millions of U.S. dollars.
  
• “Companies rely on policy stability and predictability,” said Matt Margulies, vice president for China operations at the U.S.-China Business Council. 
  

BEIJING — Abrupt power cuts in parts of China are pushing some foreign companies to invest in other countries instead.

In the last several days, many local Chinese governments have restricted power usage, limiting or even halting factory production. The latest curbs come as the country faces a shortage of coal to generate electricity, and regional authorities are under increased pressure to comply with the central government’s call to reduce carbon emissions.

“Some companies were on the fence about investing in China. They choose to not go ahead now,” said Johan Annell, partner at Asia Perspective, a consulting firm that works primarily with Northern European companies operating in East and Southeast Asia.


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