Heat Wave Takes a Toll on China

According to the Wall Street Journal, dried-up rivers, scorching heat and power rationing in parts of China are disrupting factories and threatening crop yields, adding to the country’s economic strains and echoing struggles of extreme weather around the world.

Last week, the southwestern Chinese province of Sichuan, heavily reliant on hydropower, ordered many factories in 19 cities to shut or scale back production for six days to give priority to electricity supplies for homes. 
The cuts, while limited so far, are hitting a number of global manufacturers. Foxconn Technology, one of Apple’s oldest suppliers, had to partially cease production at a plant. A Foxconn spokesman said the impact currently isn’t significant.

Toyota Motor Corp. and Volkswagen AG both said their plants in Sichuan had temporarily suspended operations. VW said it expected a slight delay on deliveries and believed they could be made up in the near future.

The aluminum producer, Henan Zhongfu Industrial Co., also said in a filing that its subsidiaries based in Sichuan will have to suspend production for a week. Additionally, fertilizer companies also reported hits to their output.

Some analysts worry that the drought and heat in China will damage the output of rice and corn crops for the fall harvest season in the country’s central regions and along the Yangtze River basin.

The impact of the drought and heat wave could lead Beijing to import more corn from Brazil or the U.S., said Darin Friedrichs, co-founder of Sitonia Consulting, a Shanghai-based agricultural research firm.

Source: WSJ Link