The Russell Group has revealed that the current power shortage in China has resulted in several electricity supply cuts and this could hurt about $120 billion in trade flows.

The energy shortage comes even after Beijing's efforts to increase the supply of coal, the country's main energy matrix.

The valuation firm concluded that the most impacted asset is integrated circuit boards - around $1.5 billion. This will affect suppliers and consumers as the world continues to suffer from chip shortages.

In the provinces affected by the cuts are the major Chinese ports of Ningbo, Guangzhou, Yantian and Shekou. However, the ports of Shanghai and Ningbo also handle much of Jiangsu province's containerized exports.

In addition, the power outage has already severely affected Jiangsu, Guangdong and Zhejiang provinces. These have seen most steel, plastic, household appliances, chemical, and textile factories close or start operating only three days a week.

Energy Cuts Continue and Slow Recovery in Global Trade Confidence

Should this electricity shortage continue for more than a month, commodities such as telephone equipment and clothing will suffer negatively. This will affect many businesses looking to secure supplies of essential products for the holiday season.

Russell Group CEO Suki Basi said that "almost every week there is a major disruption of trade at one of the world's major ports, whether in China or the United States of America."

Given the current figures, Basi pointed to the need for companies and insurers to "start taking preventive measures to ensure that their supply chains are resilient to disruption, as trade disruption will be an ongoing problem in the future."