econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 18 August 2016

China's Devastating Floods: From Adaptation To Mitigation

by Dan Steinbock, Difference Group

Econintersect Editor's Note: While many of our readers are likely aware of the unprecedented summer flooding in Louisiana, there has been similar devastation during June and July in China.

After weeks of torrential rain across central and southern China, the mainland has suffered from a series of devastating floods. As the total price tag has soared, the impact will be felt in economic growth. Photo below taken by a resident in Wuhan, Hebei province, 05 July 2016. Click for larger image.

wunan.flooding.380x200

By mid-July, almost 240 people had lost their lives and nearly 100 were missing, as China's floods had been compounded by Typhoon Nepartak and a violent tornado. Torrential rains affected 33 million people in 28 provinces, submerging huge areas of cropland.

Another round of heavy rain over the last week left some 200 people dead, including 130 in Hebei province.

One of the costliest weather disaster in history

Only days ago, President Xi Jinping emphasized the importance of early warning systems in flood-prone areas and warned officials about delays.

As the total economic toll is estimated at more than $22 billion, China's devastating floods represent the 5th costliest non-US weather disaster on record. Only the 1998 floods, which resulted in losses of $44 billion (in 2016 dollars), have been more damaging.

Economic growth is very sensitive to adverse impact on roads, rails and other damage on supply disruptions, which can result in shortages. As transport infrastructure is paralyzed or impaired, factories close their doors in industrial provinces, along with offices in post-industrial cities.

Fruit and vegetable prices usually rise in flooded regions, where prices are now monitored closely and price controls implemented as needed. In June, consumer price index (CPI) recorded growth of 1.9 percent year-on-year.

Pork prices played a major role in annualized price increases, adding some 0.7 percentage points to the headline figure. That's hardly surprising since the seven provinces that were worst hit by the floods account for more than a fourth of all hogs in China.

Downside risks in summer, rebound in early fall

Flooding patterns reflect monsoon seasons. Heavy rains in China occur along the seasonal Mei-Yu ("plum rains") front extends from eastern China across Taiwan into the Pacific south of Japan. Associated with the southwest monsoon, these rains typically affect southeastern China from mid-May to mid-June and northern China during July and August.

Severe floods tend to have a substantial impact on agricultural output, which is reflected by the CPI, due to heavy food weightings in the inflation basket. Analysts anticipate flooding to raise consumer prices in July and August by 0.2 percentage points, which would cause price levels to exceed 2 percent.

Rainfalls are particularly heavy in the summer following an El-Niño event as in 1998 and this summer. Seasonally, heavy rainfalls tend to amplify downside risks, which

often results in negative impact on economic growth in the third quarter, unless the government chooses to intervene with stimulus measures.

Indeed, a longer-term Keynesian stimulus can boost post-flood construction support repairs and rebuilding. If 1998 is any guideline, July and August could be hit by an adverse impact, but offset by rebound in September.

From adaptation to mitigation

Recurring floods increase vulnerability of the poor, particularly small farmers. Since the 1998 floods, there has been great progress in adaptation to weather shocks, while government subsidies support agricultural insurance in China. Moreover, climate adaptation has been incorporated into the national agriculture development program.

And yet, reinforcing agricultural resilience is like trying to repair a plane's engine in air after the take-off. As weather shocks grow more severe, agricultural insurance premiums are soaring and national initiatives must cope with adverse global trends.

In addition to agricultural resilience, sustainable urbanization would go a long way not just to support adaptation but to contribute to mitigation. According to some estimates, more than 100 Chinese cities are affected by annual floods, which also threaten more than 640 cities. Flooding-related economic losses soared to $300 billion between 2000 and 2014.

To fight flooding and mitigate its costs, the government is conducting sponge city pilots in some 16 major urban centers, including Beijing, Shanghai and other key cities. The goal is to retrofit existing drainage systems or build sponge cities, which excel in flood control and water conservation.

Adaptation can only respond reactively to adverse effects. In contrast, mitigation can proactively reduce the costs of extreme weather events. That requires sustainability, especially sustainable building construction, climate change mitigation, agricultural resilience - and sponge cities.

As extreme weather events are becoming an inherent part of the new normal, China is likely to pioneer bold and ambitious experiments toward sustainable economic development.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Opinion


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Surprising Pevalence of Surprises in Export Specialisation
The Destruction of the Existing Workforce
News Blog
Documentary Of The Week: China's Wealth, Collapse, And Environmental Nightmare
Where Trump Stands On Twitter
Is This Really The Final Word On Whether Calorie-restricted Diets Make You Live Longer?
Electric Mobility Has A Long Way To Go
Average Gasoline Prices for Week Ending 23 January 2017 Fell Over 3 cents
What We Read Today 23 January 2017
Badass Grandpa Tokyo Drift!
Hurricane Matthew Clocks Top Wind Speed For 2016 At 101 MPH
Consumer Debt Growth May Have Stalled In Q3
Measuring Americans' Expectations Following The 2016 Election
Infographic Of The Day: Seven Negotiation Techniques
Early Headlines: Asia Stocks Mixed, Europe Lower, Oil And Dollar Down, US Oil Production Climbs, EM Bonds Pain Coming, No Trump Tax Returns, Syria Peace Talks Without US And More
Most Read Articles Last Week Ending 21 January
Investing Blog
Netflix And Co. Surpass DVD And Blu-ray Sales
The Future Of Online Sales
Opinion Blog
Bill Maher 2017 Season Premier
Trumping World Trade
Precious Metals Blog
A Slow Start For The Week Would Be Constructive For Gold
Live Markets
23Jan2017 Market Close: Wall Street Down, But Pares Morning Losses By The Closing Bell, Crude Rises Back To Normalcy And The US Dollar Nears Slipping Below 100
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved