china is facing a new threat an energy shortage a crisis even with fuel prices high and a lack
of coal in particular factories are having to shut down and how some households have no
electricity another issue china is dealing with right now is the debt crisis at evergrand the
real estate conglomerate now on the verge of default which if it happens would have
ripple effects around the world to take a closer look at both of these issues today
we have in the studio our very own zhang taehan good to see you taehyung good afternoon davian
well let's start with the power outages in china this seems highly unusual and a
big deal for an industrial country like china what's the situation overall well
china is experiencing an energy crisis and it's starting to affect people's daily lives
adding to the risk of an economic slowdown there have been blackouts in some of china's northern
provinces and even traffic lights have been turned off local media say it's because of the lack of
electricity since coal and natural gas cost too much china is highly dependent on coal for power
accounting for more than 60 percent of the country's electricity generation
the problem is that china stopped importing call from australia last year having a political
disagreement between the two countries that's why the price has spiked by 50 and meaning
that power plants make a loss when generating electricity and this has led to a power outage
president xi jinping previously announced plans to decarbonize the economy
by 2016 and has kept the growth of coal mining demand for coal from factories in china spiked
but utilities were unable to buy enough fuel after the price soared so this is affecting ordinary
people in their daily lives it's connected to international relations as you said and china has
been called the factory of the world so it needs this power it's a it's an industrial powerhouse
so if if they don't have electricity in china this would have an impact not only there but around
the world yes that's right so the power outage is starting to affect various industries with several
provinces ordering factories to stop operations even some apple and tesla suppliers have
suspended production to follow the tighter energy consumption policies putting supply chains at risk
amid rising demand for electronic goods the chinese operations of south korea's steel giant
pusko have also been affected posco was forced to stop operating and will resume in early october
16 out of 22 provinces cannot use power so unless china and australia sold their conflict
this situation could be prolonged goldman sachs cut its forecast for china to 7.8 percent
down from 8.2 the banking giant says the energy crisis poses significant downside
pressures and affects 44 percent of china's industrial activity
well taehyung let's move on to the other big issue that's affecting china right now a crisis really
the possible collapse of uh the real estate giant evergrand what's the overall situation there okay
so evergrand is one of china's largest real estate companies and also has interest in other sectors
but it's that's snowballed as it borrowed to finance its multiple pursuits the group has more
than 300 billion us dollars of liabilities and the issue right the issue there of course being that
300 billion dollars it's got to make interest payments on that and if they're not able to as
they were not able to last week then they could face a default they're in a grace period right now
but uh that would be a massive deal if they were to default what's the company doing to get these
payments back on track okay so it was announced today that evergrant will raise over one and a
half billion us dollars by offloading part of xenjing bank in an attempt to meet its enormous
financial obligations evergrand says it will sell a 19.93 stake in the bank it runs to a state-owned
enterprise the company admits its liquidity crunch has adversely affected the bank and selling
part of it will stabilize the bank's operations evergrand has another 47.5 million dollar interest
payment due on september 29th yes that's today but it remains to be seen if the firm has the funds at
hand the chinese real estate conglomerate reportedly missed one payment deadline
last week right and so now they're in the grace period uh and some are talking about a possible
lehman brothers style issue like we saw uh back at the financial crisis that started in the u.s
um others are saying though that the chinese government will step in and bail out evergrand
though we might not have seen a clear sign of that yet tell us more about that though
of course so the chinese authorities are watching the situation but have not given a
clear sign that they're going to intervene let's take a listen to an expert for some more insight
so i would like to clarify that china is already intervening every grand day is not uh anymore a
company that can take the sessions we're not going to see collapse of the financial sector
in china it's neither demolition because this company maybe with a different name maybe you
know cut in pieces is going to continue to operate by finalizing those units and she added that those
units may be incorporated through local government state-owned developers to reduce the systemic
risks right well fascinating report tejano depending on how the situation unfolds we'll have
to uh keep have you keep us up to date on it so appreciate the reporting today my pleasure devin