Drought roils China’s economy
Islam News – China’s central bank announced that it would cut its five-year interest rate yesterday, an effort to bring a little relief to the country’s huge construction and real estate sector.
The rate cut comes as record-high temperatures and a severe drought have crippled hydropower and prompted the shutdown of many factories in west-central China, an industrial base.
Sichuan Province, for instance, normally generates more than three-quarters of its electricity from huge dams. The summer rainy season usually brings so much water that Sichuan sends much of its hydropower to cities and provinces as far away as Shanghai.
But an almost complete failure of summer rains this year has meant that many dams now cannot generate enough electricity even for Sichuan’s own needs, forcing factories there to close for up to a week at a time and triggering rolling blackouts in some commercial and residential districts.
Fallout: Sichuan’s three main rivers feed the Yangtze River, so hydropower cutbacks have also started to affect downstream areas, like the city of Chongqing and adjacent Hubei Province.
Details: The central bank cut the rate by 0.15 percentage points yesterday, to 4.3 percent, and said that it was reducing a one-year interest rate by 0.05 percentage points, to 3.65 percent.
Source: The New York Times