Worst Drought in Decades Threatens China’s Economic Recovery

Wan Jinjun, a 62-year-old retiree who has swum the Yangtze River almost every day for the past decade in Wuhan, said he had never seen such a drought.

The extreme summer has damaged Asia’s longest river, which flows about 3,900 miles (6,300 kilometers) through China and feeds farms that supply a lot of food and the country’s many hydroelectric power plants, including the Three Gorges Dam – the world’s largest power plant. A year ago, the water flowed almost to the edge of the river where Wan used to swim. Now, the level is the lowest at this time of the year since records began in 1865, showing sand, gravel and brown mud coming out of rotting fish.

“And it’s still going down,” said Wan, who last week had to climb nearly 100 steps – often hidden under a waterfall – to cool off on a 40-degree-Celsius (104-degree Fahrenheit) day.

The exposed banks, along the Yangtze River in Wuhan, on Aug. 22, 2022.
Image credit: Bloomberg

The low water level in the Yangtze has caused power outages in many hydroelectric power plants, causing power outages in many parts of the country. Mega cities including Shanghai are turning off lights, escalators and reducing air conditioners. Tesla Inc. has warned of disruptions to its Shanghai factory’s supply chain, and others such as Toyota Motor Corp. and Contemporary Amperex Technology Co., the world’s leading manufacturer of batteries for electric vehicles, have closed factories.

With climate change likely to bring unprecedented heat and droughts and droughts, the current blackout raises long-term questions about China’s reliance on hydroelectric power, the country’s largest source of energy, which generated about 18% of its electricity in 2020, according to BloombergNEF. .

Although the energy deficit was smaller than in 2021 – when the lack of coal led to a reduction in electricity throughout the country – it increases the difficulties that the authorities are facing in restoring an economy already damaged by frequent Covid shutdowns and the problem of goods. And the time could not be more difficult, in the coming months President Xi Jinping is expected to seek a third option. It is also embarrassing for Chinese officials, including Xi and Premier Li Keqiang, who in the past. he swore to prevent such duplication.

The southwestern province of Sichuan, which is enduring the region’s worst drought since the 1960s, has been hit hard by its reliance on hydroelectric power. While dam production has halved in the region, extreme heat has caused electricity to increase by almost a quarter. This will increase the pressure on the electricity network that serves people almost the size of Germany and also provides the industrial area that houses Tesla’s sales factories.

The country also has the world’s largest fleet of solar panels and wind turbines, and is spending heavily on renewables as it tries to reduce its dependence on imported oil. Chinese companies invested $98 billion in clean energy in the first half of 2022, more than double the same amount in 2021.

Sichuan’s power deficit shows that hydropower, often considered the most sustainable energy source, is not as reliable as coal, according to Hanyang Wei, a BloombergNEF analyst. This raises questions about how well China can transition away from oil, because wind and solar are not sustainable, Wei said.

Following last year’s crisis, which caused power cuts in factories across the country, China began planning for more coal-fired power. Under government pressure, coal mining has grown by 11% this year.

Li Shuo, an expert at Greenpeace East Asia, said the situation in Sichuan is reminiscent of the power outages in Hunan province in late 2020, when extreme cold weather reduced wind output and sent more heat energy. The government responded with a number of concessions for power plants in Hunan, Greenpeace found report published last month.

“I hope the solution they find for this is no longer a coal mine, but I’m afraid that may be where they’re going,” Li said.

Shoppers walk down an escalator, temporarily closed to save electricity, at a shopping mall in Wuhan on Oga. 22, 2022. Photo credit: Bloomberg

Abundant coal reserves have prevented the problem from spreading to other parts of China, but have done little to help Sichuan, where hydropower generates more than three-quarters of the country’s electricity.

China’s worst power outages since last fall have caused power outages for many industrial customers through Aug. 25. Companies including Toyota and CATL have already closed plants in the area for several days. Advanced polysilicon manufacturer Tongwei Co. he said his plant has been affected, further strengthening the key market for solar panels.

Some of its effects were also felt in areas outside of Sichuan. The Bund waterfront in Shanghai turned off outdoor lighting, and Wuhan in central Hubei province suspended its famous Yangtze River parade.

The current situation is expected to be less severe than last year because the strictest measures have been taken only in Sichuan, which has only 5% of the country’s GDP. However, it could be at risk to the $18 trillion economy. Economists are already downgrading this year’s growth to 4 percent, well below the government’s target of 5.5 percent.

A water level indicator on the banks near the Han River on Aug. 22, 2022.
Image credit: Bloomberg

China is not the only country struggling with extreme heat this summer. Extreme heat in Europe has caused the Rhine River to freeze, with the lowest levels dropping to 30 centimeters, affecting navigation on the waterway. Drought in India has reduced rice plantings by 13% so far this year, threatening global food supplies.

In Wuhan, the city where the coronavirus first appeared at the end of 2019, temperatures exceed 40 degrees Celsius this summer. On a recent weekday, Luo Yi, a 26-year-old Yangtze port worker, was trying to stay comfortable in the shade. His company moved its floating port closer to the coast earlier this year to make more room for shipping on the drought-stricken route.

He said: “This is the hottest season I can remember.

At Heartland 66, one of Wuhan’s most upscale shopping malls with stores including Gucci, Prada and Tiffany & Co., orders to reduce electricity use meant shoppers had to walk down suspended escalators. The air conditioners were running at a low rate, which left the food courts above them flooded.

Soon this area will get relief. Sichuan’s capital Chengdu is expected to be cold and rainy from Thursday, according to the China Meteorological Administration. In time, China and other countries are facing increasing problems due to the instability of the climate.

A swimmer in the Yangtze River in Wuhan. Image credit: Bloomberg

Near Hankou’s Yangtze River in Wuhan, the heat didn’t stop Wan and others from taking a swim. Jiang Guangming, 65, who has been rowing in the river since he was a teenager, knelt in the water to keep the sun off his shoulders.

“The water would have reached the level of the streets in previous years,” he said rudely, looking at the river’s edge. “This year even the sand on the banks of the rivers is visible.”

Top photo: Banks exposed, due to water shortages due to drought, along the Han River near the Yangtze River in Wuhan. Image credit: Bloomberg

Copyright 2022 Bloomberg.

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