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http://www.nytimes.com/2008/02/01/world/asia/01china.html
Chinese Blizzards Reveal Rail Limits
By DAVID LAGUE
Published: February 1, 2008
BEIJING -- Acute electricity shortages across
a swath of central and southern China after winter
blizzards disrupted coal deliveries have exposed
the fragility of trans****t networks in the world's
fastest growing major economy.
The snow and ice that have led to chaos at
trans****t hubs as up to 200 million migrant
workers and other travelers attempt to return
home for the Lunar New Year festival next week
have also restricted coal ****pments along
critical rail arteries feeding power stations in
the southeast, China's densely populated
manufacturing heartland.
Food prices are increasing in major cities
including Beijing as distribution bottlenecks
and bad weather hamper deliveries of
vegetables and meat, the official Xinhua
news agency re****ted Thursday.
These shortages are a reminder that China's
huge, interconnected economy and its
1.3 billion people are increasingly vulnerable
to even short-lived interruptions to the flow of
goods and services.
In a sign of the governing Communist Party's
nervousness about widespread resentment
ahead of the country's most im****tant holiday,
senior leaders including Prime Minister Wen
Jiabao have personally visited train stations
to assure frustrated travelers that the
authorities are working to solve the trans****t delays.
The huge crowds waiting in freezing conditions
at some railway stations in southern China
began to clear Thursday, state media re****ted,
as rail services to central and inland provinces
became more frequent.
But electricity shortages were expected to
continue after supplies were disrupted to 17
provinces, or about half the country, in recent
weeks.
Worst hit were the provinces of Guangdong,
Guangxi, Guizhou, Hunan, Anhui and Jiangsu,
where more than 30 million people were
affected by blackouts or brownouts,
according to government estimates.
Steel and aluminum output is also expected
to suffer, analysts said.
"I think the current weather-related problems
have major ramifications for the manufacturing
sector and therefore the economy, let alone
the fact you have a lot of unhappy people,"
said Victor Shum, a Singa****e-based analyst
with the energy consultancy Purvin & Gertz.
"The issue of trans****t and distribution of
energy is China is very serious," he said.
China mined about 2.3 billion metric tons of
coal last year, according to government
statistics, and burning that fuel supplies more
than 80 percent of the country's electricity.
Despite the health risks posed by severe
air pollution in urban and industrial centers
and international pressure on the Chinese
government to reduce greenhouse emissions,
most analysts expect China's coal consumption
to increase for decades if rapid economic
growth continues.
The bulk of China's coal is mined in the
western provinces of Shaanxi and Shanxi
and the northwestern region of Inner Mongolia.
But many of country's coal customers are
clustered in the industrialized southeastern
and central coastal provinces, so it must be
hauled long distances on China's vast but
overextended rail network.
More than 40 percent of rail capacity is
devoted to moving coal, and the authorities
have been investing heavily in new lines and
cargo-handling facilities in an attempt to
keep up with demand.
Despite these efforts, China has suffered
persistent power shortages in industrial
centers for more than five years as electricity
output failed to meet demand from a booming
economy.
Demand for electricity increased 14 percent
last year, according to official estimates.
This problem became much worse when
heavy snow and ice over the past two weeks
cut power supplies to the rail networks in
central China that carry the bulk of coal to
power stations and damaged electricity grids.
Some power stations in southern China were
operating with only a few days' supplies of
fuel in reserve, according to government officials.
Fuel stocks at power plants operated by the
State Grid Cor****ation of China, which account
for more than 10 percent of the country's
installed generation capacity, had fallen to the
lowest level ever, the official media re****ted,
with the company ranking reserves at 85 of
these stations as unacceptably low.
The Railway Ministry warned this week that
coal supplies could be further hit when some
mines close over the Lunar New Year holiday.
In response, the authorities have diverted extra
rolling stock to moving coal and sharply
increased the volume ****pped south by sea
from the major northern ****t of Qinhuangdao.
In a bid to limit shortages, the government
last week ordered ****t authorities to halt coal
ex****ts for two months.
While the weather has undoubtedly hurt coal
supplies, some analysts have pointed out that
government policy had contributed to the
power shortages.
In a bid to contain rising inflation and avoid
antagonizing consumers, the authorities have
capped the prices utilities can charge for
power at a time when coal prices have been soaring.
Without the incentive of adequate profits, power
produces have been reluctant to increase output,
analysts say.
"If there had not been this mismatch, power
producers, particularly in Guangdong, might have
been more aggressive in im****ting coal," Mr. Shum,
the analyst in Singa****e, said.
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