A resident wearing a breathing mask to avoid the heat walks on the street on May 23, 2019 in China. Electricity load in China’s Henan province hit a new record on Monday, largely driven by demand for air conditioning, as devastating heatwaves spread across regions north of the Yangtze River.
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China is currently entangled in a devastating heat wave that could severely affect its economy, according to the chief economist of Hang Seng Bank of China.
“The heat wave” is a pretty dire situation,” Dan Wang told CNBC.Squawk Box Asia“on Thursday, adding it could possibly stretch into the next” two to three months easily. ”
China is facing record heat waves and is battling a power outage in the Yangtze River area. Extreme temperatures have disrupted crop growth and threatened livestock.
“It will affect those industries that use a lot of energy and it will have [a] She said:
“We’ve seen a slowdown in production in the steel industry, in the chemical industry, in the fertilizer industry. Those are very important things when it comes to construction, agriculture and also manufacturing in general.” , Wang added.
According to a state media reports, most areas of the Yangtze River basin have seen extremely high temperatures since July. Rainfall in the region is about 45 percent below average in recent years, based on data from the Ministry of Water Resources.
The report also cites Liu Weiping, vice minister of the Ministry of Water Resources, as saying on Wednesday that reservoirs have added 5.3 billion cubic meters of water in the middle and lower Yangtze River since August.
The latest heat wave and power outages are reminiscent of Big power outage last year covers many important Chinese manufacturing centers such as Guangdong, Zhejiang and Jiangsu.
“Last year, as we estimated, the period of power shortage caused China’s GDP growth to drop by about 0.6 percent,” Wang said. “This year, we think it’s going to be a lot higher… I would say 1.5% lower.”
“Right now, we’re putting full-year GDP growth at 4%. If the current situation continues, then I have to say the growth rate is probably below that. [3%]”She added.
