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China Braces for Cold Winter Amid Energy Shortages

China's national power agency is warning coal and electricity shortages could make for a long cold winter for tens of millions of people in the developed east. The government is considering raising electric rates again this year as a means to avert a power crisis, which could hit in just a few weeks.

Despite frantic efforts to meet demand, China's State-run media say that national energy supplies will be overwhelmed by local needs in the coming cold weather months.

The China Daily newspaper Monday quoted sections of a new report from the National Power Regulatory Commission. The report notes rising demand throughout the country but says heavily populated eastern China faces the greatest energy shortages.

Larry Chow, director of energy studies at Hong Kong's Baptist University, says Shanghai will almost certainly face severe power cuts this winter with significant fallout.

"Definitely they will be cutting off the power on a rotational basis in Shanghai this winter, that's for sure," he said.

In Beijing, where winter temperatures routinely drop far below freezing, the government admits it only has about half the coal supplies it needs to meet local heating demands.

The government report says Beijing's centralized heating system should start running as scheduled on Monday but delays elsewhere in the country are likely. Even limited delays in some cities could mean at least 200 million people will not get heat during the early winter months.

Professor Chow says the power shortages will also seriously weaken eastern China's industrial network.

"For some of the factories, even if they close down two days a week that means there is a loss of production for two days, so definitely that's going to effect the economy," said Professor Chow.

But that might be a mixed blessing for Beijing, which is trying to slow the country's overheating economy.

While per capita energy use remains low compared to most Western countries, China's enormous population means even a slight increase in demand locally translates into a massive surge nationwide.

China's energy production is rising but cannot keep pace with demand. New hydroelectric projects, nuclear power plants and oil pipelines are expected to narrow that gap in the future. For now, most of China depends on coal for energy, which is less efficient and hard to transport.

The China Daily says the government is considering a third rate increase for electricity. Most power plants are not operating at full capacity, say analysts, because the price of coal is rising while the price of electricity is still below market value.

Government officials say the current energy shortage could last for another two years.