China Accelerates Nuclear Power Construction to Foster State-Owned Industry Giants

China's pools its national economic power to back the CCP's global political ambitions: expert

High voltage relay towers are seen in front of the Wujing coal-electricity power station in the Minhang district of Shanghai on Aug. 22, 2022. Hector Retamal/AFP via Getty Images

On the eve of the twentieth Chinese Communist Party (CCP) Congress, authorities accelerated the construction of nuclear power stations, the energy base to support CCP-controlled mega corporations intended to outcompete their global peers.

“It is an attempt of the CCP to create industry giants through state monopoly, and to participate in global competition,” Shi Shan, a U.S.-based Chinese political and economic affairs expert, told the Hong Kong edition of The Epoch Times.

The CCP’s desire to control China’s major industrial enterprises was articulated in the “Three-Year Action Plan for the Reform of State-owned Enterprises,” adopted on June 30, 2020. The action plan aimed to promote the restructuring of state-owned assets and enhance CCP control.

This action plan was scheduled to complete most of its so-called reforms by the first half of this year, before the twentieth CCP’s congress, according to Weng Jiming, deputy director of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) in a Jan. 17 interview with official media.

Weng emphasized that the ideal pattern is “sole enterprise for one industry, unique enterprise for the whole industry,” saying that central enterprises and local state-owned enterprises should be integrated across enterprises, levels, and regions.

Notably, power grids and railway and airport transportation are key priorities for the CCP, as stressed in a central economic work conference that took place in December 2021 that emphasized the importance of reforming state-owned enterprises.

China Boasts It Has World’s Largest Power System

On Sept. 26, mouthpiece China National Radio reported that the Liaoning Hongyanhe Nuclear Power Station in Wafangdian City, Dalian, was fully commissioned with six units and that it has the largest installed capacity in China and is the third largest nuclear power plant in the world.

The same day, Song Wen, deputy director of the Planning Department of the State Energy Administration, claimed at a press conference that China has built the largest power system in the world, with an installed power generation capacity of 2.47 billion kilowatts.

However, according to Li Yunqing, director of the Economic Operation and Adjustment Bureau of the Development and Reform Commission, who spoke at a press conference on Jan. 18 that China’s maximum electricity load was about 1.2 billion kilowatts in 2021, and it was expected that electricity consumption and maximum electricity load would increase by about 10 percent in 2022.

The contradiction between the official media reports has led to public skepticism. Online comments expressed doubt: “The world’s largest installed capacity and power grid, why has China failed to meet the demand for electricity for years, resulting in widespread power cuts and power shortages?” and “Why is it difficult to maintain a load of 1.2 billion kilowatts despite the installation of 2.4 billion kilowatts, and why is it impossible to maintain electricity for people’s livelihood?”

In August, power shortages in China made headlines for the third consecutive year.

A worker rides past coal-fueled cooling towers at a power plant in Guangan, in southwest China's Sichuan province, on Aug. 22, 2004. Frederic Brown/AFP via Getty Images

Electricity Crisis

China’s energy policymakers are eager to construct nuclear power stations, linking the goal to a crisis in hydroelectric power generation that happened this summer.

From June to August, many places in China encountered record-high temperatures. At the same time, rainfall in the Yangtze River basin decreased significantly, resulting in a serious shortage of reservoir water storage.

China’s energy system, which relies on hydroelectric power generation, is facing serious challenges, and Sichuan Province was in the worst situation.

As a base for the eastward transmission of electricity from the west, Sichuan’s electricity must reach provinces including Hunan, Jiangxi, Jiangsu, and Zhejiang, and the municipality of Shanghai. In addition, Sichuan’s ultra-high voltage grid can handle a maximum of 500 kV power transmission, which makes it impossible for the province to expand power transmission capacity from other provinces or cities.

Due to the crisis, an emergency notice issued by the Sichuan Economic and Information Department and the Sichuan Electric Power Company shut down all industrial power users of the Sichuan power grid from Aug. 15 to 20, according to Chinese internet portal Sohu, on Aug. 14.

On Aug. 15, Chinese battery manufacturer CATL announced it would suspend production at its Yibin plant in Sichuan, and Toyota’s joint venture factory in Sichuan Province’s Chengdu city suspended operation from Aug. 16–Aug. 20. Local auto factories of FAW-Volkswagen, Dongfeng Peugeot-Citroën, Geely, Chang’an, and Livan were all affected to varying degrees, according to a Chinese auto industry information website.

Power restrictions have affected many integrated circuit semiconductor companies, including chip packaging and testing companies such as SK Hynix, chip design companies such as Mixic, and semiconductor manufacturing companies such as Tsinghua Unigroup.

Current affairs commentator Wang He said in an Aug. 21 commentary for The Epoch Times that the high temperature led to a rapid increase in demand for electricity, while the drought caused a dramatic reduction in hydropower supply, contributing to the power shortage.

However, the root cause is the rigidity of the CCP’s power system, lack of early warning capability, and lack of emergency preventive measures, Wang said.

Since 2018, China’s power system has struggled with sufficient installed capacity but insufficient effective capacity, and surplus generatable power but insufficient available power, according to a WeChat post by Yue Hao of the Jibei Electric Power Economic and Technical Research Institute.

Wang believes problems in the Chinese power system may be traced to a bottleneck caused by the CCP’s state-owned enterprises reform. In 2020, the CCP began pushing the “fast-forward button” toward mega-scale consolidation and restructuring, while ignoring the efficiency and flexibility deficiencies of the industry.

An image of Chinese leader Xi Jinping is seen at an exhibition about the history of the Chinese Communist Party, at Peking University's Red Building in Beijing, on Oct. 7, 2022. Jade Gao/AFP via Getty Images

Centralized Economic Power Fuels CCP’s Global Political Influence

Ji Da, a U.S.-based China expert, said sources close to Beijing’s top officials indicate that the CCP plans to take total control of China’s economy. That plan includes a monopoly of state-owned enterprises in various industries. In other words, the CCP intends to use pandemic lockdowns and restrictions to strengthen centralized power, which current leader Xi Jinping deems was lost when Deng Xiaoping began his “reform and opening up” policy.

“Reform and opening up,” a political reform from a “planned economy” to a “socialist market economy” in China, was first proposed on Dec. 18, 1978, by Deng, the CCP’s second-generation leader.

Nearly 100 such mega-state enterprises, in a bid to make them “bigger, stronger, and more sophisticated,” will be headed by senior officials at the vice-ministerial or ministerial level, appointed directly by Xi Jinping, according to the anonymous source, Da told The Epoch Times.

By consolidating the economic powers of industry giants, the CCP seeks to maintain control and seize global bargaining power, to further influence and put pressure on the international community, Da said.

However, it won’t be as easy as the CCP would like, added Ji, as systemic problems will ultimately intensify conflicts in various areas and plunge Chinese society into chaos.