Economic theory predicts that price controls create shortages. The lower mandated price discourages production. At the same time, it encourages demand. Hence, a demand imbalance develops.

That is what is happening in China at the present time. CNN reported that some of China's power plants have less than three days of coal supplies. "It is the second time in three months that Chinese power plants have run short of coal, an unintended effect of government-mandated price controls -- a throwback to communist central planning -- to shield the public from rising global energy costs... Utility companies have let coal stocks dwindle and are buying less fuel after Beijing froze power prices last year, while allowing the market-set costs that producers pay to rise." CNN revealed.

CNN added, "Beijing has also frozen retail prices of gasoline and diesel. That helped farmers and the urban poor, but it has spurred sales of gas-guzzling luxury cars and propelled double-digit annual growth in fuel consumption." As a result, oil refiners suffered "heavy losses" and reduced production. In turn, fuel shortages erupted in parts of southern China.