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Due to tight power supplies and high demand, all industrial users in the Sichuan region in China have been forced to shutdown for a week. The factories producing metals, chemicals and other
industrial goods in the country's southwestern province were asked to shut down or curb their output in a bid to ration power consumption and prevent blackouts among residential
populations. According to a notice issued by the Department of Economy and Information Technology of Sichuan, industrial users across 19 out of 21 cities in the province have been ordered to
suspend production from August 15 until August 21, in order to prioritise residential power supply. The entire province spans 485,000 square kilometres, which is nearly twice as big as the
UK. Officials noted that this measure was taken in an effort to prioritise residential supply and ensure no power shortages and blackouts occur. They decided that from today, 19 cities,
with the exception of Panzhihua and Liangshan will face cuts. As a result, power generators began losing money and reduced production, with some even stopping altogether, which heavily
impacted their industrial output. Experts noted that this year, the crisis could be worse, as Beijing's economy was dealt a major blow thanks to China's stringent
"zero-covid" policy, which plunged large regions into lockdown at once. Aside from rationing energy in certain sectors, the government is also looking to bolster its energy
supplies, at a time when European countries have been scrambling to ensure their own stockpiles are filled ahead of this winter. As a result, Beijing loosened restrictions on coal
production and boosted imports of coal from Russia, which the EU has completely banned. DON'T MISS: China poised to copy Putin’s squeeze over Taiwan and CRIPPLE the world [INSIGHT]
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up on crude oil from Iran, which has been hit with sanctions by the US, resulting in inventories building up in January and April, according to research by Michal Meidan of the Oxford
Institute for Energy Studies. Once again Moscow has proved to be a valuable ally for China, as Russia overtook Saudi Arabia as China's biggest supplier of crude in May. Given
China's importance to a number of global supply chains, it is unclear what impact the industrial shutdowns will have to the rest of the world. Last year, when China shut down some
major ports due to a Covid outbreak, it caused chaos in industries across the world, causing months-long delays on a number of products.