Beijing (AFP)
At its strongest in 25 years: The rise in production costs increased last month in China at a record rate, according to official figures released Thursday, against a backdrop of soaring commodity prices that are weighing on the activity of the workshop of the world.
The global recovery has led to a sharp rise in the cost of raw materials, especially coal on which China is heavily dependent to power its power plants.
Electricity producers are struggling to recoup their costs but cannot pass on the price increase to their customers because China strictly regulates electricity prices.
Consequences: power plants are idling despite strong demand and electricity is rationed, which has boosted production costs for companies.
Last month, the cost of production rose 10.7% over one year, the National Bureau of Statistics (SNB) announced on Thursday.
This is its highest pace on record according to NBS data dating back to October 1996.
This result is higher than that of August (9%), which was already a record in 13 years.
In September, "prices in industry continued to rise as a result of rising coal costs and in some energy-intensive sectors," noted Dong Lijuan, a BNS statistician.
Coal prices rose 74.9% year on year last month.
This surge in prices has led to total or partial closures of factories in China, which are struggling to be supplied with current while the authorities are imposing electricity rationing in several regions.
This penalizes production, pushing up costs for companies at a time when global supply chains are already under strain.
In China, electricity prices are usually tightly controlled and cannot exceed 10%.
To alleviate these shortages, the government on Friday authorized an exceptional increase in electricity prices to allow producers to recoup their costs.
This increase is capped at 20%.
© 2021 AFP