European Companies Urge China to Better Manage Energy Crisis

(Bloomberg) -- A European business organization called on China to improve its handling of the energy crisis, saying some companies are complaining they get text messages in the middle of the night telling them to halt the next day’s production.

Representatives of the European Union Chamber of Commerce said at a video conference on Wednesday that firms sometimes get just an hour’s notice to reschedule shifts at plants with 1,000 employees.

“We need far better communication from the government in order to help our companies to cope,” said Joerg Wuttke, the organization’s head. “We don’t ask for privileges. We just ask for clarity.”

The chamber asked authorities in the world’s second-largest economy to revise how they decide which companies must cut or cease production, calling for a “scientific, transparent approach” and better communication of decisions.

The complaints underscore the troubles businesses are having with a power crunch rippling across China, hitting factory floors and homes as the nation’s coal-based electricity producers can’t buy enough of the fuel. The crisis is impacting several provinces and crimping growth forecasts.

Price Increases

The government last week took its most dramatic step yet to address the problem, with the cabinet letting electricity prices rise as much as 20% against a benchmark, compared with the previous cap of 10%.

The European chamber started voicing its concerns about the electricity situation in May when Klaus Zenkel, board chairman of the chapter in southern China, said about 100 of the 250 members had been affected by the shortages.

The chamber didn’t say Wednesday how many members across China have been impacted. Wuttke said it has been in close contact with the Commerce Ministry on the matter. 

Shortages are expected to continue until “at least” March, he said, asking the government to do more until then to allow companies to make plans. “Predictability makes a huge difference to us,” Wuttke said.

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With assistance from Bloomberg