Electricity consumption in China has apparently risen 15% year-over-year in February, and 13.2% higher than January. The rise follows four consecutive months of falling consumption, which amounted to declines of as much as 20% in some provinces. There might be many explanations for why this could be an anomaly, but economists might try to look further into this.
The data from Industrial Info noted that, in Hebei province, China’s largest steel-making area, consumption increased by 30%. Two possible reasons are the beginning of an economic recovery or simply people returning to work following the New Year holidays. Another possibility is that the Chinese government is supporting employment in an effort to keep the domestic economy from deteriorating further.
If companies were rebuilding inventories resulting from earlier slowdowns, the recovery might end as quickly as it began. Building inventories without orders does not betoken an expanding economy.
Paul Ausick
March 12, 2009
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