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China drought, scorching temperatures causing blackouts and factory closures

A severe drought and scorching temperatures are causing rolling blackouts in China that are harming the economy and negatively affecting supply chains.

A massive drought, coupled with record high temperatures, is wreaking havoc on China’s economy, causing the country to shut down factories and endure rolling blackouts. 

China’s Sichuan Province, one of the most populous and fastest growing industrial centers in the country, has been stricken by a severe drought that has meant little rain to power hydroelectric dams that typically generate three-quarters of the area’s electricity that is sent to cities as far as Shanghai, The New York Times reported this week. 

The lack of rain, which is being exacerbated by scorching temperatures exceeding 100 degrees Fahrenheit, has left rivers with unusually low water levels. This shortage has prevented the dams from providing enough electricity to support the Sichuan Province. As a result, factories in the area have been forced to close, sometimes for a week at a time.

In addition to shutting down factories, the power shortage has also caused rolling blackouts in some areas downstream from the Sichuan Province in places like the city of Chongqing and adjacent Hubei Province.

"Part of the issue here is that China has a broader water shortage," Dean Cheng, senior research fellow at the Heritage Foundation's Asian Studies Center, told Fox News Digital. "Entire river systems in China have gone dry. The Chinese are redirecting rivers from the south to the northern plains of China which includes Beijing because the rivers up there are running dry."

Rainfall in the Yangtze basin has been around 45% lower than normal since July, and high temperatures are likely to persist for at least another week, official forecasts said. 

As many as 66 rivers across 34 counties in Chongqing have dried up, state broadcaster CCTV said on Friday. 

"For the Yangtze," Cheng said, "part of the problem is that the river goes all the way out to the sea near Shanghai. When the river levels are falling you start affecting the draft of the vessels that can go up and down. If you start requiring the ships to operate at less than full load, you also start affecting their ability to move stuff out of the country in terms of products and also moving into the upstream to the internal supply chains." 

Cheng explained that the energy crunch and supply chain issues have been further exacerbated by China's continued support for coronavirus lockdowns, which have crippled the economy even further.

China's central bank announced on Monday that it would cut its five-year interest rate by .15 percentage points and lower the mortgage reference by a bigger margin as Beijing boosts efforts to revive the economy. 

China's economy, the world's second biggest, narrowly avoided contracting in the second quarter and a raft of data released last week showed that the economy unexpectedly slowed in July, prompting some global investment banks, including Goldman Sachs and Nomura, to revise down their full-year GDP growth forecasts for China.

Reuters contributed to this report

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