Problem One
The Chinese Communist Party permits the price of coal to rise, whilst capping the price of electricity at a ridiculously low level. The effect of this, naturally, is that for every watt of electricity generated, the generating companies loses money. The more power that is generated, the more money the companies lose. The generating companies, therefore, reduce their production of electricity to a low level. No big surprises there.
It gets a bit cold, and the Chinese Communist Party, realising that cold people are more likely to be rebellious people, orders the generating companies to resume full output, and further orders all transportation networks (road, rail) to give priority to shipment of coal to the power plants.
Along comes Spring Festival, when half a billion lemmings decide to travel across the nation in order to give their money to their parents so that they can lose it gambling at Mahjong. But wait – there are no trains. Why? Because all the trains are busy transporting coal.
Problem Two
The Chinese Communist Party caps the price of diesel at the pump, apparently unaware that the price of oil has long since hit USD$100 per barrel, and is still climbing. The refining companies, quite naturally, reduce their production of diesel (and what they do produce is made with high-sulphur content crude which nobody else wants).
With no diesel, heavy road transport and farm machinery grinds to a halt, which means that consumer goods and other products cannot be transported from A to B. The first result of that? Shops with nothing to sell. The second result is that farms produce less, and what is produced cannot be transported to market.
Solution
The Chinese Communist Party announces that the weather in China is the worst in fifty years, and that road and rail networks are paralysed as a result. Chairman Hu goes to talk to some coal miners to encourage them to produce more coal. Foreign media totally buy into the story and the Chinese Communist Party is again let of the hook thanks to the happy gullibility of the Free Press.
The End. Until The Next Time.