Why China’s Recent Drought Matters to YOU

Friday, January 18, 2008 3:04
Posted in category Uncategorized

Yangtze DroughtTwo weeks ago I wrote a post entitled China is RUNNING OUT OF WATER about a recent announcement that China wil have exploited all water resources by 2030… apparently their timeline was a bit off.

With one of Southern China’s worst droughts in 50 years, I have posted several times on Guangdong power outages and the need for dredging on the Yangtze. As the drought has continued, and the effects become more severe, there are now a number of important reports coming out that… and anyone manufacturing in China should be reading up on this as the drought is affecting the economy in a number of ways:

1) Transportation – As I have reported on several occasion (here, here, and here), the Yangtze river has required extensive dredging over the past several months. capacity is down as everything from coal barges from the middle reaches to the coast to containers of motorcylce parts from chongqing are having to reduce their loads and move slower through the affected areas

2) Energy – Following a summer of rolling power outages in Guangdong, provincial officials has just recently sent a cable to Beijing asking for immediate relief as apparently the province has produced 20% less power than is needed. 20%.

Should the gap not be met, you can expect more power outages, and depending on the severity, these power outages could be disruptive.

3) Food and AgricultureFurther reports are that Hainan’s drought are also reeking havoc on crops and livestock. with recent inflationary pressure on food in China already reaching levels that have required government action, this drought will only put further pressure on pricing

Stay tuned to this topic. If the drought continues, then I expect there will be delays and disruptions that affect manufacturing and prices in China. Already it is affecting mine as I made the decision that February’s What if, What Else, and What are the odds discusses water and energy in China

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One Response to “Why China’s Recent Drought Matters to YOU”

  1. Rich says:

    January 21st, 2008 at 8:06 pm

    Further to this post, and specifically to the power issue, this issue is going to be one that will start reverberating through the system as areas that are low on hydro are also running out of Coal too.

    China power shortages spread to central regions