FACTBOX-China's options to end its power shortage

July 30 (Reuters) - China is facing its worst summer power shortages in four years, because generators cannot source coal supplies or refuse to pay soaring fuel prices while they have to sell their power at unprofitable state-set tariffs.

The government has years of experience in trying to keep diesel and gasoline pump prices down while international crude markets soar, so it has a range of policy options to end the shortage -- but none of them promise an easy solution.

RAISE POWER TARIFFS, UNCAP COAL COSTS -- This would return loss-making plants to profitability, and encourage plants that have been struggling to look for coal more aggressively.

In the longer term, higher coal prices should encourage the mine investment China desperately needs to cut the death toll in its shafts and pits -- the most dangerous in the world.

But higher electricity prices risk feeding through into already substantial inflation and could cause social discontent.

They would also put extra pressure on manufacturing firms with slim margins already suffering from the U.S. economic slowdown and the rise of China's yuan currency.

TIGHTEN COAL EXPORT QUOTAS -- Miners may grumble and international trade partners will likely complain, but if Beijing tightens export controls to keep more coal at home, it might be easier for generators to get their hands on supplies.

Traders are eagerly awaiting the second batch of quotas for the year, and many have anticipated it will fall short of target.

However, this is only a temporary solution to more fundamental problem -- and the country's growing import bill shows that on its own it is unlikely to be enough.