INDUSTRIAL gas firms in China may be saddled with risks such as power shortages, macroeconomic uncertainties and rising environmental threats despite solid growth, PricewaterhouseCoopers reported.

In China, the world's third-largest industrial gas market after the United States and Germany that makes up for 4 to 5 percent of global demand, domestic gas producers only account for a small portion.

International industrial gas giants including Praxair Inc, Air Liquide SA and Air Products have set foot in the market with an on-year growth rate of some 10 percent.

Inadequate supplies of electricity will remain one of the biggest hurdles to growth as producers rely heavily on electricity to create their products.

A nationwide shortage has forced the government to tell some manufacturers to shut down production on a rotating schedule last summer.

The world's top electricity consumer after the United States expects a 'small surplus' in 2007, the National Development and Reform Commission said at the end of last year

Also, government measures to curb investment in industries like real estate also threaten the outlook of gas producers because it will result in less production in steel mills, which is the leading consumer of industrial gases.

Despite these issues, the report said gas producers should be able to count on continued success 'with good customers, sound business practices and a stable business environment.'