China Issues First National Drought Warning, What Effect Will It Have On The Economy?

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 China has issued its first national drought warning this year as extreme heat has disrupted crop growth and threatened livestock.


A national 'yellow alert', issued on Thursday comes after regions from Sichuan in the southwest to Shanghai in the Yangtze delta experienced a very hot week. It is two levels below the most serious warning on the Beijing scale.


The following is the situation experienced in several regions of China at this time:



One of the Yangtze's main flood basins in Jiangxi province, Poyang Lake has now shrunk to a quarter of its normal size this year.

A total of 66 rivers across 34 districts in the southwestern province of Chongqing continue to dry up, with rainfall this year falling 60% below the seasonal norm with temperatures in Beibei district reaching 45 degrees Celsius.

Infrastructure and emergency services in Chongqing are under increasing pressure, with firefighters on alert as mountain fires and debt erupt across the province.

Gas utilities in Fuling district will be shut down in preparation for any serious eventuality.

The water resources ministry has ordered drought-hit agricultural areas to protect vulnerable crops and increase planting to compensate for losses ahead of harvest.


According to data from China's emergency ministry on Thursday, high temperatures in July alone have caused direct economic losses of 2.73 billion yuan ($400 million), affecting 5.5 million people.


Meanwhile, analysts expect economic growth may drop below 3% if this situation continues.