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Power glut as factories scale back

China will see a continuous power glut this year as the global economic downturn forces manufacturers to scale back output and electricity consumption, according to a report released by the China Electricity Council yesterday.

Chinese power enterprises would experience their toughest days in the first two quarters of this year.

Power consumption is likely to resume growth in the third quarter, fueled by recovery in the export-oriented eastern and the southern coastal areas. That will drive up demand in the central and western region in the fourth quarter, according to the report.

The annual power consumption is likely to register a 5-percent growth this year, said Wang Yonggan, the council's general secretary.

As the global financial crisis began to take a toll on the real economy, power demand plummeted in China as enterprises shut down or cut back working hours.

Power consumption grew 5.23 percent last year, 9.57 percentage points lower than a year ago and the slowest in eight years, according to the council's data.

The slowing demand was mainly due to the industrial sector. Electricity used by the service industry and the rural and urban residents continued to grow.

China also plans to spend 580 billion yuan (US$85 billion) on the power industry this year, with a greater focus on nuclear reactors, wind farms and grid construction. The figure, unveiled by the National Energy Administration on Tuesday, is slightly higher than the 576.3 billion yuan spent on power infrastructure last year.


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