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Short term play on China power shortage

China is currently facing their worst power shortage in over a decade, which has led to power rationing of major factories in Guangdong (among other important regions) and for many factories to shut down production for a few days out of the week.

This has the potential to continue through end of the year according to article below:

[https://www.9news.com.au/national/china-news-power-shortage-crisis/d32ebdbb-be14-4c78-abc2-5f43d429a554](https://www.9news.com.au/national/china-news-power-shortage-crisis/d32ebdbb-be14-4c78-abc2-5f43d429a554)

With reduced manufacturing capabilities coming from China, I think there could be a lucrative play shorting companies who rely on these exports downstream, or on these Chinese manufacturers themselves.

The first areas impacted that come to mind for me are US automotive, computers & electronic products, or simply shorting VWO which is very China heavy.

Thoughts on this play?

Other ideas for other sectors that may be impacted, or plays to make assuming this will have the impact suggested by this article?

What do you think?

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4 Comments

  1. I live in NYC and we (everyone to their phone) just got an Amber alert today about lowering our Electric use to avoid power outages so honestly i could see this happening to NY. But I’m not sure which stocks/ETF’s to buy to profit off it.

  2. Find out which diesel generators they are likely to use and see if you can go long on that for a short term play maybe. They might be renting them so maybe look into who provides that kind of service in that geographic location.

    Trying to short industries seems sketch to me. Ones big enough to be listed are likely to have business continuity plans in place. It’s probably super bad for small businesses who can’t bribe who they need to to ensure they don’t get rationed.

    Interesting trade idea though.

  3. Keep in mind how large China is. You might as well say all of America is also suffering a power shortage when in fact it’s just the east coast due to the heat wave and the surge in air con use…

How should my portfolio look like?

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