Power rationing in Sichuan, other regions to drag Aug industrial output by 1 ppt – Citic Securities

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Southwest China’s Sichuan province and some provinces in the middle- and lower-reach of the Yangtze River have started to impose power rationing due to a shortage in power supply, but as the temperature is expected to decline and coal-fired power generation has been picking up, the impact of this round of power rationing won’t last long, said Citic Securities in a note on Wednesday.

It’s expected to drag China’s industrial output in August by around 1 percentage points and drag China’s third-quarter GDP by 0.13 percentage points, said the broker, adding that so far it remains a relatively small disruption to the economic growth.

The key factors affecting the economic growth in the second half of the year is the effect of the policy measures aimed at boosting market demand, especially, real restate investment and consumption, it said.