“Production curbs related to Beijing’s green policy measures and recent power outages will substantially constrain industrial production in China,” says Wang Lisheng, an economist at Nomura. “This will weigh on exporters, who may need more time to deliver orders because of forced power shortages.”

The slowdown in semiconductor manufacturing will pile on top of an ongoing chip shortage—kickstarted by an unexpected post-pandemic surge in demand in January—as well as ballooning freight rates on shipping containers. The cost of shipping goods from China to the U.S. has increased by almost 1,000% since the pandemic began.

Beijing is targeting net zero carbon emissions by 2060, which requires energy providers to reduce emissions and rely more on renewable energy. To meet the requirements, provincial governments have imposed temporary power rationing on factories across China since June—particularly in the southern tech manufacturing hub of Guangzhou, where an unseasonably dry summer depleted the province’s supply of hydropower.

China’s power producers are also suffering from a coal and gas shortage, as spot prices of the commodities soar, making electricity generation unprofitable for Chinese power plants. But government regulation is what initiated the more recent and widespread power cuts in China. 

In 2019, China’s state planner, the National Development and Reform Commission (NDRC), assigned each province a target for reducing the carbon emission intensity in energy production. In mid-August, the NDRC lambasted several provinces for failing to meet the quota and gave them until the end of the year to bring carbon emissions in line with national planning.

Regional authorities responded by rationing power, leaving factories across several cities in the dark for hours or days at a time. Analysts at Goldman Sachs warn the forced production halts could drag China’s economic growth forecast to 7.8% this year, down from the current forecast of 8.2%, as manufacturing and export volumes contract as a result of the power rationing.

Nomura estimates China’s manufacturing purchasing manager index—a measure of industrial productivity—will fall to 46 from 49.2 in September, with any number below 50 reflecting contraction. The Japanese bank predicts China’s exports will contract slightly, too, due to power rationing.

“If the power shortages were only due to coal shortages, they could be possibly resolved in one or two months,” Wang says. “But Beijing is unlikely to substantially soften its green policy measures until spring next year after China hosts the 2022 Winter Olympics.”

Beijing typically scales back polluting manufacturing activities in advance of hosting international events, in order to ensure clear skies. Analysts suspect Beijing’s determination to host a successful Olympics is also the reason behind the government’s hard-line approach to containing COVID-19 outbreaks.

Chinese ports have only just unclogged congestion caused by China’s draconian COVID-19 containment measures. In August, authorities in Ningbo—a coastal city just south of Shanghai—closed a terminal at the world’s third-busiest port after a single dockworker tested positive for COVID-19. The Ningbo closure hit two months after authorities in Shenzhen partially closed another major port—Yantian—to contain a mild COVID-19 outbreak.

“That pent-up demand from the Ningbo port closure could be more than offset by the supply shocks caused by Beijing’s green measures, power outages and resultant factory slowdowns,” Wang says.

More must-read business news and analysis from Fortune:

• What a modern energy crisis looks like and why no country is safe
• Frustrated carmakers upend industry after chip shortage shatters their faith in suppliers
• Portugal leads the world in COVID-19 vaccinations
• A WHO-approved Novavax vaccine could upstage mRNA jabs—if it can solve its manufacturing delays
• Bitcoin has another major pollution problem brewing