China's power crunch is being fuelled by a 'simple and brutal' approach to climate change targets

The Chinese phrase of Jiandan Cubao, which literally means "simple and brutal", is something people should bear in mind if they want to understand China's policymaking process, and why policies are executed in ways that rather than cure a headache are bound to make it bigger.

This is especially true at a time when President Xi Jinping frequently touts a people-centred approach by calling to strengthen a top-level design - a euphemism for a top-down rule, targeted implementation of policies, and better preparations for a rainy day.

But for bureaucrats, old habits die hard. When pushing for an unpleasant policy change, or facing an emergency, they still frequently resort to the "simple and brutal" approach to attain the end goal of the policy and damn the consequences.

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The latest example is the power crunch that in recent days has swept much of the eastern part of China, home to the bulk of the country's population and manufacturing, from Heilongjiang province in the northeast down to the province of Guangdong. Judging from media reports, blackouts have seriously disrupted not only businesses but people's lives. All this makes a mockery of the people-centred approach promoted daily in the official media.

In several northeastern cities, power cuts have occurred without pre-warning or any indication of how long the blackouts would last. There have been reports of residents being trapped in elevators in high-rise buildings, traffic lights going out, and water companies warning users to store water and prepare for rolling cuts in supply over the coming months. In some cities and rural areas, candles have sold out with residents forced temporally to live in darkness while mobile phones and computers have gone blank.

Businesses are also badly affected. In the economic powerhouse of Guangdong, manufacturing companies in certain cities have been ordered to operate three days on, four days off, on a weekly basis and in some extreme cases, they are allowed to operate only one day a week.

Understandably, China's power crunch has caused international worries about the country's overall economic growth and the possibilities of disrupting global supply chains ahead of the Christmas season in the West.

The power squeeze comes after global investors have been spooked by a recent spate of intense regulatory actions targeting a wide spectrum of businesses, from e-commerce to delivery to ride-hailing to education to property.

There are several reasons for the outages. The first is the obvious gap between supply and demand as China, the first major economy to recover from the coronavirus pandemic last year, has cranked up production to meet global demand at a time when manufacturing output in much of the world is still constrained because of lockdowns. While demand soars, the shortage of coal, which is a global phenomenon, has affected China in particular because so much the country's electricity generation comes from coal-fired power plants - more than 70 per cent in the first eight months of this year, according to official figures.

Secondly, as coal prices rise, price caps on electricity have reduced the incentives for operators of coal-fired power plants as they are not allowed to pass on the higher costs to end users, resulting in a situation in which the more they generate electricity, the bigger losses they rack up.

More importantly, as the end of the year approaches, local governments are rushing to meet their emission targets. Contrary to widespread international suspicions about China's pledges to fight climate change, the Chinese leadership has broken down very detailed and hard annual targets for local officials to meet. Failing to do so will adversely affect their annual performance reviews and their career prospects. Under the five-year plan covering the period from 2021 to 2025, China aims to cut energy intensity by 13.5 per cent and carbon intensity -a ratio measuring how much carbon is emitted in growing the economy - by 18 per cent, from 2020 levels. On a longer horizon, China has already announced it will ensure its carbon emissions peak by 2030 and that the country will become carbon neutral by 2060.

It is typical of bureaucrats to allow those targets to be missed for much of the year and then scramble to meet them in the final quarter. First they will impose curbs on businesses with high energy consumption and density, covering industries from steel to cement. That is what has happened in the economically strong provinces including Guangdong and Zhejiang. When that is not enough, the one-size-fits-all approach comes in handy as power cuts apply to all walks of life and work. That is what happened in the northeastern provinces of Liaoning, Jilin and Heilongjiang, known as China's rust-belt.

These problems could have been greatly mitigated if officials had planned better or more precisely rationed electricity rather than arguing it could not be helped. After all, electricity for household use accounts for less than 20 per cent of total electricity consumption.

Of course, the "simple and brutal" approach is nothing new. It is deeply ingrained in the mindset of local officials for their own convenience or for covering up their incompetence.

The fiasco of switching out coal heating in Hebei province in 2017 to fight heavy pollution is another example. At the end of the final year of a three-year plan to phase out coal heating in the province, which surrounds the nation's capital of Beijing, local officials employed the "simple and brutal" approach by banning the use of coal and demolishing coal stoves before they had ensured that the infrastructure for switching to gas was complete and there was enough gas to use. That left hundreds of thousands of residents and students without heat during freezing winter days, causing a national uproar and forcing the authorities to roll back their campaign.

It is easy to see the destructive effects of the "simple and brutal" approach. Getting rid of it will be much harder.

Wang Xiangwei is a former editor-in-chief of the South China Morning Post. He is now based in Beijing as editorial adviser to the paper

This article originally appeared on the South China Morning Post (SCMP).

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