Chinese blackout fears downplayed

22 June 2005
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23 June 2005 | Liam O'Brien

UK analysts have played down fears that expected power cuts in China will disrupt supply chains.

The Chinese State Electricity Regulatory Commission last week warned of potential electricity shortages and blackouts at manufacturing hubs in the industrialised east and south of the country.

However, China's large labour pool and relatively low-tech manufacturing industry will help it to work through any power cuts, according to Ray Jewitt, a managing partner at management consultancy Accenture and member of the CIPS supply chain committee.

Chinese production is still largely manual labour, he said.

"We're not exactly talking about highly automated lines going down.

"With so much labour there are ways they can work round power problems."

There would have to be a catastrophic power failure over a long period of time for us to notice here in the UK, Jewitt added.

Les Mosco, managing director of consultancy Purchasing Strategies, agreed.

"Unless power cuts affect all the potential suppliers of a particular product, it is not going to be a problem.

"A whole sector would need to be knocked out for an extended period of time for there to be an impact."

SMjun2005

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