China's power crunch dwarfs Evergrande's troubles in investors' eyes

FILE PHOTO: A molten salt solar tower stands behind electricity pylons at a power station near Dunhuang, Gansu province, China April 13, 2021. - Reuters

SHANGHAI (Reuters) - China's power supply crunch, that has shut factories across the country, may pose a much bigger threat to the economy than the debt crisis at Evergrande Group, prompting investors to shun industries vulnerable to power shortages such as steelmaking and construction.

China is facing a power squeeze from a shortage of coal supplies, tougher emissions standards and strong demand from manufacturers and industry that have triggered widespread curbs on usage. Factories have stopped operations due to power shortages and government mandates to meet energy and carbon reduction goals.