China for the first time announced abnormal temperatures due to drought in the country

The bed of the Jialing River at its confluence with the Yangtze River is exposed due to drought on August 18, 2022 in Chongqing, China.

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China has declared a drought emergency for the first time this year as scorching temperatures dry up areas of the Yangtze River and put pressure on the power grid as the country battles record heat waves.

Authorities issued a national yellow alert late Thursday after China’s central and southern provinces endured weeks of heatwaves as temperatures in dozens of cities topped 40 degrees Celsius or 104 degrees Fahrenheit.

The heat wave disrupted crop growth, threatened livestock production and forced some businesses to close to conserve energy for homes.

China’s Sichuan province, which has a population of 94 million, this week ordered the closure of all factories for six days to alleviate the region’s electricity shortage. The outage came after the water level in the reservoir dropped and the need for air conditioning skyrocketed due to the heat.

According to the Ministry of Water Resources, precipitation in the Yangtze River Basin has also decreased by about 45% compared to the average in recent years. According to state broadcaster CCTV, 66 rivers have dried up in 34 counties in the southwestern region of Chongqing.

A sprinkler irrigates a corn field to alleviate the effects of a drought caused by high temperatures in Xilangshi village of Boai county in Jiaozuo, Henan province, China, 20 June 2022.

Daily newspaper of China | Reuters

Beibei region in southwestern China. experienced record temperatures 45 degrees Celsius, or 113 Fahrenheit, on Thursday, the National Weather Center said.

Chinese officials this week unveiled measures to reduce the impact of the drought, including cloud seeding to speed up rainfall, $44 million in aid for the hardest-hit communities, and shutting down some energy-intensive sectors.

Deng Wang, chief economist at Hang Seng Bank China, told CNBC’s Squawk Box Asia on Thursday that the heat wave could have a significant impact on China’s economy. Wang said the country’s steel, chemical and fertilizer industries are already experiencing a decline in production.

“It will affect these large energy-intensive industries and will have [a] a domino effect throughout the economy and even the global supply chain,” Wang said.

In July, extreme temperatures caused direct economic losses of 2.73 billion yuan, or $400 million, affecting 5.5 million people, according to data released Thursday by China’s emergency ministry.

CNBC Sumati Bala provided reporting

A section of the dried-up Yangtze River in Jiujiang in China’s central Jiangxi province, August 19, 2022.

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