The biggest snowstorm in 50 years is wreaking havoc with China’s transportation and power-supply infrastructure and triggering widespread shortages the week before the Lunar New Year. Over a foot of snow fell in Nanjing, reports Bloomberg. "We face a very severe situation in ensuring supplies of coal, electricity, oil and transportation,'' said a government spokesman.
As many as 5% of China's coal-fired power plants, which generate 78% of the nation's electricity, were shut because snow blocked shipments of coal. Power shortages are a perennial problem in China, and may force the government to remove price caps aimed at controlling inflation. These latest developments will likely push up near-term inflation to levels "that will be very uncomfortable for policy makers and China's investors,” said an investment analyst.