August 20, 2014

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CSRlive Commentary

06.15.2011 - 07:20PM

Category: Environment

Rains Bring Relief for Six-month China Drought, But Chronic Water Problems Loom

Chokepoint

By Nadya Ivanova, Circle of Blue

Although now satiated, the dry spell is the latest in a growing trend of severe water shortages threatening China's food production, energy generation and accelerating modernization.

Heavy rainfall began in China at the beginning of the month, easing the effects of a prolonged drought that has been ongoing in the nation's central and eastern regions since January. Though this spring's dry spell has affected 35 million people across five provinces in the Yangtze River Basin -- leaving 3.5 million with limited access to drinking water -- analysts predict limited impact on national food production, consumer prices and power output.

The extreme weather, however, is the latest in a series of water shortages exposing the risks that limited freshwater resources pose for the world’s biggest agricultural producer, top energy consumer and fastest-growing industrial economy.

This is the second tenacious dry spell in China this year. During the winter, severe water scarcity in the northern wheat-growing regions threatened to cripple harvests and forced farmers to dig deeper into declining underground aquifers. Now, the drought that was gripping the typically lush Yangtze River Basin suspended cargo shipping along a 224-kilometer (140-mile) stretch in the middle and lower reaches of the river and exacerbated power shortages at the beginning of what is typically the peak summer season.

As Circle of Blue and the China Environment Forum have been reporting since February, droughts and water shortages across China are now occurring with such frequency that they are putting the nation's farm productivity and energy generation at risk, while modernization demands and global commodity prices are steadily increasing.

And while experts are still assessing the overall impact of the drought on China's economy, the direct economic losses in the affected provinces are nearing $US 2.3 billion (RMB 15 billion), according to China's Ministry of Civil Affairs. Though China has been experiencing frequent droughts, its annual grain production has increased by nearly 10 percent since 2006. Last year, China produced 546 million metric tons (602 million short tons) of grain, representing an increase of 15.6 million tons (17.2 short tons), or 2.9 percent, from the year before.

Though the recent dry spell is expected to have only a limited impact on economic growth, it is doing nothing to ease the effects of China’s rising price inflation, at 5.3 percent in April, much higher than the government’s target of 4 percent. Meanwhile, national food prices went up by 11.5 percent in April, while non-food item prices increased by 2.7 percent.

And experts say the weather in July and August -- the crucial growing period -- will be the major factor for the final output.

Read the entire article at Circle of Blue.

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