By Joe Cash and Farah Master
BEIJING/HONG KONG (Reuters) -China’s central bank said on Tuesday it will provide an additional 100 billion yuan ($14 billion) to banks to support rebuilding areas devastated by floods, after recent extreme weather damaged around 6 million acres of crops.
The world’s largest agricultural importer has in recent weeks been plagued by Typhoon Gaemi lashing its eastern seaboard, record rains in its southern rice fields, and intense heat waves across its northern corn and wheat yielding regions.
After state media reported Vice Premier Liu Guozhong called for China’s vast agricultural sector to push for a bumper harvest this autumn, the central bank announced it will issue a further 100 billion yuan of a re-lending facility to support 12 areas with flood prevention and reconstruction initiatives.
The People’s Bank of China (PBOC) will direct the funding towards Fujian, Guangdong, Henan, Heilongjiang, Hunan, Jilin, Jiangxi, Liaoning, Shaanxi and Sichuan provinces, along with the megacity of Chongqing and the Guangxi region, and to farmers, small and micro-sized firms and households, a statement said.
The PBOC had already issued a total of 2.61 trillion yuan in re-lending quotas to support agriculturalists and small firms.
“The PBOC will urge its branches in relevant provinces to make good use of the newly added re-lending quotas… ensure the funding needs of disaster-stricken enterprises and help them resume production,” it added.
China suffered 76.9 billion yuan ($10.1 billion) in economic losses from natural disasters last month, with 88% of those losses caused by heavy rains and floods, according to the Ministry of Emergency Management.
It was the biggest amount of losses for the month of July since 2021, ministry data showed.
Liu, during his visit to Liaoning and Jilin provinces over the weekend and Monday, urged officials to improve the agriculture sector’s capacity for disaster prevention and mitigation, according to the official Xinhua news agency.
He also “urged measures to drain accumulated water, promote the restoration of affected crops and guide farmers in replanting areas where crops were destroyed,” the report added.
Producers from the U.S. to Brazil and Indonesia will be watching to see whether China will increase its food imports to meet the demands of its 1.4 billion people.
A cut in domestic farm output could bolster the Asian giant’s demand for overseas supplies, which would impact global food supply and prices.
Beijing envisions 92% self-sufficiency in staple grains and beans by 2033, up from 84% during 2021-2023.
But an increase in the number of extreme weather events calls that into question.
Natural disasters in July affected almost 26.4 million people across China, with 328 either dead or missing. More than one million people were relocated, 12,000 houses collapsed and 157,000 more were damaged.
Some 2.42 million hectares (5.98 million acres) of crop area were also affected. ($1 = 7.1719 Chinese yuan renminbi)
(Additional reporting by Ella Cao and Ethan Wang in Beijing; Editing by Jacqueline Wong and Christian Schmollinger)
