China issues first national emergency extreme heat due to drought

China issued its first drought emergency this year as scorching temperatures dried up areas of the Yangtze River and strained the power grid as the country battled a record heat wave.

Authorities issued the national alert in yellow late Thursday after central and southern China provinces suffered weeks of sweltering heat, with temperatures in dozens of cities exceeding 40 degrees Celsius, or 104 degrees Fahrenheit.

The heat wave disrupted crop growth, threatened livestock, and prompted some industries to close to conserve energy for homes.

China’s Sichuan province, which has a population of 94 million, ordered all factories this week to close for six days in a bid to ease the region’s electricity shortage. The shutdown came after lower tank levels and increased demand for air conditioning amid the heat.

Precipitation in the Yangtze River Basin region has also decreased by about 45% compared to the average in recent years, according to data from the Ministry of Water Resources. As many as 66 rivers have dried up across 34 counties in the southwestern region of Chongqing, according to state broadcaster CCTV.

Beibei District, southwest China experienced record temperatures The National Center of Meteorology said it was 45 degrees Celsius, or 113 Fahrenheit, on Thursday.

Chinese officials this week unveiled measures to reduce the impact of drought, including cloud seeding to stimulate precipitation, $44 million in disaster relief for hardest-hit communities and shutdowns of some energy-intensive sectors.

Dan Wang, chief economist at Hang Seng Bank in China, told CNBC:Squawk Box Asia“Thursday that heat It can have a huge impact on China’s economy. Wang said the country’s steel, chemical and fertilizer industries are already experiencing a slowdown in production.

“This will affect large, energy-intensive industries and will affect [a] The knockout effect is throughout the economy and even in the global supply chain,” said Wang.

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 Ministry of Emergencies.

– CNBC sumathi bala Contribute to reporting