China Using Prices to Curb Electricity Demand

Caixin: Regional China Utilities Get Nod to Raise Prices in Hope of Easing Outages

Electric utilities in a handful of Chinese provinces are raising power prices after a nod from the nation’s top economic planner, which is grappling with the contribution of record-high coal prices and withering stockpiles to a worsening power crunch.

Coal-fired power plants in Ningxia, Shanghai, Shandong, Guangdong and parts of Inner Mongolia have increased their fixed rates charged to grid operators by 10%, the maximum allowed under national regulations, a Caixin analysis shows.

...The agency said on Monday it will start a new mechanism in October that will link the coal market to industrial power prices. Once prices for coal bought by power plants surpass 1,300 yuan ($201) per ton, for every 50 yuan increase, electricity sale prices will increase by 0.015 yuan per kilowatt-hour (kWh).

China's policy response is the right one. This is a good illustration of why I am both bearish on China, while remaining long-term bullisho their rise as a nation because they apply common sense solutions. Using common sense in the West will get you branded a racist, extremist, transphobic terorist.

I can't call it a wager yet because I don't have a trade on, but I'm watching the forex markets like a hawk for a sign of spillover. I am currently long calls on DXY, but that is not a China-specific trade.