- Based on the list of the 26 entities enclosed at the end of the document, most of them had, in fact, been granted to operate at the Hydroelectricity Consumption Industrial Demonstration Zones in Sichuan in what was previously believed to be a compliant method.
As The Block reported last year, such industrial parks were set up by the Sichuan government in a bid to attract energy-intensive industries to help consume the excessive hydroelectricity in the region during the summer rainy season that would otherwise be wasted.
Since 2020, dozens of bitcoin mining facilities, including many of the entities on the government's document list, had been approved to reside in these industrial parks to enjoy stable supply from state-owned power grid.
In return, they went through an application process to be registered with the government as well as pay a premium fee to the local government and the State Grid. But perhaps it's because of this prior registration with the local government that they became the first victims of the crackdown.
Couple things to note here:
- CCP gives no fucks about any deals or arrangements individual states make
- CCP gives no fucks about preserving trust or incentives for people to deal with them on the level
This is Xi squeezing people into state-approved behavior. Which is just more incentive to go underground. As George Friedman is fond of pointing out, it is the weak dictator who flexes.