China’s Growth Does Not Abate – Power Consumption Goes Up
Despite what is habitually said of Chinese stats, some elements seem to indicate that “growth” is not abating in the Chinese economy. Electricity consumption is generally considered as the most reliable indicator to check the reality of Chinese production.
According to power usage stats, the September rise was the strongest Y/Y, and October and November energy consumption should also rise strongly to 15 and 20 % according to projections.
China’s power consumption in September rose 10 percent year-on-year to 322.4 billion kilowatt hours, the fastest pace of growth since June last year, the China Electricity Council said on its Web site on Oct. 15.
The increase followed 8 percent growth in August and indicated continued economic recovery, it said.
Power generation in August gained 9.3 percent year-on-year to a record 344 billion kWh, as demand from manufacturing plants soared in line with rising consumption fueled by the government’s stimulus spending. The council did not provide output figures for September.
Power consumption in the first nine months rose 1.4 percent year-on-year to 2.7 trillion kWh, it said.
Grid operators sold a combined 2.2 trillion kWh of electricity in the first nine months, up 3.2 percent year-on-year, it said.
A total of 199.7 billion yuan was spent on construction of power plants in the first three quarters, 83.2 billion yuan of which went on coal-fired projects.
China added 49 million kWt of generating capacity in the first nine months, comprising 32.9 million kWt of thermal power, 12.1 million kWt of hydropower and 4 million kWt of wind power, the council said.
A total of 219.2 billion yuan was spent on grid construction and upgrades, it said.
The 10 percent year-on-year growth rate of power consumption in September was “normal” in comparison with a decline in consumption a year earlier, Yang Zhishan, a power analyst with CITIC Securities Co. Ltd., told Caijing.
Year-on-year growth in power use during October and November will likely reach 15 percent and 20 percent, respectively, Yang added.
Power consumption began falling year-on-year last October amid the global downturn. It began to grow again in June, when it expanded 4.3 percent. Growth rose further to 6 percent in July and 8.22 percent in August.
Excellent information, FM. Keep up the good work. I appreciate your viewpoints.
Electricity usage is up because the weather has been hotter and China has placed some additional production lines back in service. Unfortunately, production is not the same as sales. Sales are not improving that much, so I would not draw too many inferences about the Chinese recovery from their electricity usage. See the following article for September numbers on imports and exports… better than expected but much worse than last year.
http://online.wsj.com/article/BT-CO-20091014-703414.html