Counting the Costs of Floods in China

By Asit Biswas, Cecilia Tortajada 18 August, 2016

With increasing floods in China, Biswas & Tortajada expand on how to mitigate this destructive force

Floods out of all other natural disasters cause the most damage, USD104bn p.a.; China suffers the highest losses
Death toll from China floods has fallen but costs are on the rise; Rains in Yangtze Basin 27% above average in 2016
Poor urban planning more than dams to blame, 200 cities remain waterlogged every year; more drainage needed

It is a little-known fact among the general public and politicians that floods cause more damage each year globally than any other form of natural disaster. According to the United Nations, over the 20-year period between 1995 and 2015, 157,000 people died due to floods and another 2.3 billion were affected.

Floods, more than other natural disasters cause more damage each year with global costs at US$104bn p.a.

Currently, global average annual flood losses are estimated at $104 billion. The country incurring the highest losses is China, followed by the USA and India. These losses do not include disruptions to global supply chains when industries located in flood plains are affected by floods. The 2011 flood in Thailand first brought this problem to global attention. However, the country which has the potential to disrupt the global supply chains the most because of floods is China, followed by Brazil, Russia, and India.

China suffers the highest costs … 3/10 of most costly floods since 1950 were in China

Because of topography, high population, urbanisation and tremendous economic growth during the past decades, China has had three of the ten most costly global floods since 1950. Equally, because of population density, all three Chinese floods resulted in high fatalities compared to the other seven floods elsewhere where deaths were in the hundreds.

At global ranking number two is the July-August flood of 1998, which resulted in 3,656 deaths and an economic loss of $43.7 billion in 2014 USD. The sixth most costly global flood was also in China, during July to August 2010. It caused 829 deaths and losses of $31.1 billion in 2014 USD. In tenth place is the flood of June to July 1996 which caused 2,775 deaths and economic damage of $19 billion in 2014 USD.

Flooding has been a perennial and recurrent problem in China. Earlier, one of the important tests of good rulers was their ability to protect their citizens from the ravages of floods. This requirement continues even today.

Death toll from floods in China has steadily declined…

The good news is that the death toll from floods in China has steadily declined due to government actions like the construction of dams, dikes and levees, early warning systems and prompt evacuation measures. The bad news is, the economic costs of floods are steadily increasing and are likely to increase in the foreseeable future.

… yet, flood costs are set to rise, especially in 2016 when rainfall is 21% above the average

It appears that the 2016 floods are likely to enter into Chinese record books as some of the most severe. The floods season is not yet over. Damages incurred are already significant. This is primarily because rainfall in China this year has been 21 per cent higher than average. In Yangtze Basin, it has been 27 per cent higher than average.

The Yangtze is the longest river in China and the third longest in the world. It is also the most important water artery in terms of the economy and development. A serious Yangtze flood has major implications not only for China but also for the world by disrupting manufacturing and transportation links as well as the global supply chain.

In terms of national policies, flooding was recognised as a major problem during the post-1995 period when each of the two floods in 1996 and 1998 caused several thousand deaths and billions of dollars in economic damages. While floods became a serious concern, the solutions then proposed went only part of the way to solving the problem. The main policy was to construct large dams which could effectively store flood waters. Major dams like Three Gorges were constructed, having flood control as an important objective.

Dams do not contribute to high flood damages…
… without 3 Gorges & other dams, damage would be much higher

There is absolutely no doubt that had the Three Gorges and other dams not been constructed, flood damages in China during high rainfalls years, including this year, would have been significantly higher.
Paradoxically, in the Chinese social media, major dams have been accused of contributing to high flood damages. Nothing is further from the truth. Well designed and managed, large dams invariably ameliorate flood damages. They do not add to them.

Storage dams, however, are not enough. When high rainfalls occur over the Chinese cities, they currently do not have adequate infrastructure to drain away excess waters. Cities have grown much faster than drainage works could be planned, executed and managed. Consequently, the number of cities that are seriously affected by floods has more than doubled during the past seven to eight years. At present, more than 200 Chinese cities are routinely waterlogged each year during the monsoon season.

Breakneck expansion of cities & poor urban planning to blame …
… Wuhan’s lakes fell from 127 to 40 today … not sufficient to buffer/store flood waters

Breakneck expansions of major cities, poor planning, endemic corruption and the absence of good land use planning, have further exacerbated the problem.

Take Wuhan, the capital of Hubei province at the confluence of Yangtze and Han rivers. Historically known as the “city of 100 lakes,” it has however lost more than two-thirds of its lakes, down from 127 to 40, during the period 1949 to 2015. Lakes and wetlands used to store water during the flood years were filled to make way for construction projects. The 40 remaining lakes are not enough of a buffer to store flood waters. Furthermore, their storage capacities have been impaired by heavy sedimentation due to poor land use practices and construction activities.

Corruption and wasteful spending have further aggravated flood problems in China for decades.

The situation still has not improved that much. According to local media reports, the person responsible for the construction of a 1 billion RMB drainage project in Wuhan was accused of accepting 1.6 million RMB in bribes between 2005 and 2013.

Floods likely to raise food prices
Consumer prices likely up 0.2% + weaker 4Q16 GDP growth

Furthermore, the National Development and Reform Commission noted on 10 July that fruit and vegetable prices in some flooded areas have “risen significantly.” They instructed local authorities to “closely monitor prices.” Flooding is likely to increase annual consumer prices by 0.2 per cent, to over 2 per cent. It would also have a negative impact on China’s GDP growth in the third quarter. Equally, construction and rebuilding activities may increase aggregate demand. Thus growth in the fourth quarter, after a weak July-August period, will likely be higher.

China’s leadership is well aware of the economic and social risks imposed by floods. Premier Li Keqiang has already noted that the “government is better prepared than ever”. It has taken several measures and is fully prepared for possible floods since July-August are “key periods for floods”. Similarly, President Xi Jinping has ordered an array of measures to step up relief actions.

China’s leadership is well aware of socio-economic issues  & are better prepared than ever…

China has made considerable progress in recent decades to reduce fatalities due to floods. However, a new mindset is needed at all levels of decision-making, central, provincial and municipal. It has to be realised that improper developments can contribute to floods, and floods do affect development. Policymakers need to realise that floods are both developmental issues and humanitarian concerns.

 … but systemic problems in cities need to be overcome

There are systemic problems that need to be overcome. Water bodies and wetlands in and around cities have been filled up for construction activities, thus have seriously disrupted natural drainage patterns. Lakes, as in Wuhan, have steadily been shrinking.

Governments at provincial and municipal levels have mostly turned a blind eye to construction activities in flood-prone areas. Cities have not kept up with the construction and proper operation and maintenance of storm drainage systems. Dikes protecting the cities may be working but drainage systems in many cities are grossly inadequate.

Floods cannot be eliminated but impacts can be reduced with proper planning

Technically and economically, floods in China cannot be completely eliminated. However, their impacts can be significantly reduced by proper land use planning and flood management. For Chinese leaders at all levels, floods are a challenge that needs to be overcome to deliver good living conditions for the society.

Finally, many poor decisions taken over the past 50 years on urban development cannot be eliminated overnight. It will take political will, time, money, and good holistic planning and implementation before flood damages in China can be significantly reduced.

This article was first published in Policy Forum.

Further Reading

  • Flood Insurance in China: Lessons & Opportunities – Only 2% of the RMB147bn of losses from 2016 summer floods are covered by insurance. With various pilots since the 80’s failing, Liu expands on past & future role of flood insurance for CWR
  • 8 Reasons to Invest in Irrigation in China – To grow 75% of total grains & 90% cash crops, China’s irrigated areas need water equivalent to the Pearl River flow. With an additional 18 million hectares to adopt water-saving tech by 2030, CWR’s Hu says investment in irrigation is worth exploring
  • Water-nomics: Trade-offs Along The Yangtze – With significant economic, water use and pollution disparities along the Yangtze River, China Water Risk & the Foreign Economic Cooperation Office of the Ministry of Environmental Protection, publish a joint brief to explore strategies to find the right development mix. Check out some of the key findings in this review
  • Sponge Cities: An Answer To Floods – Floods have cost China close to RMB2 trn between 2000-2014. Today, with 641 cities prone to flood risk, the Chinese govt has turned to sponge city pilots. Do they work? How much do they cost? CWR reviews
  • China: Gaps in Rainy Day Funding – Given increasing economic losses & negative impacts on food production due to extreme weather, China Water Risk’s Hu highlights gaps in flood control investment and expands on how the Chinese government expects to finance rainy days ahead
  • Climate Risks: Are We Ready? – Climate change is high on the global agenda, especially with COP 21 at the end of this year and yet we still face major stumbling blocks. See CWR’s key takeaways from various 2014 climate conferences from climate tools, regional resiliency plans, legacy issues to limited climate funding
Asit Biswas
Author: Asit Biswas
Professor Biswas is a leading authority on water, environment and development-related issues. He has been an advisor and confidant to Presidents, PMs and Ministers of 19 countries, six Heads of UN Agencies, two Secretary-Generals of OECD and several heads of IGOs and MNCs. He was also Director of Canada’s Department of the Environment. Asit co-founded the International Water Resources Association (IWRA), the World Water Council and the Third World Centre for Water Management and currently sits on the International Advisory Board of Pictet Asset Management and the Indian Institute of Technology and is Strategic Advisor to Singapore International Water Week as well as Distinguished Visiting Professor to the University of Glasgow. Asit is a distinguished Academician. With 950+ publications, his h-index of 44 makes him an ‘outstanding scientist’ and a Research Gate score of 41.89, puts him into the top 2.5% of all scientists across all disciplines globally. He founded the International Journal of Water Resources Development and is the author or editor of 88 books; his works have been translated into 41 languages. He has also seven Honorary Doctorates plus numerous prestigious global environment and water awards, ranging from the Aragon Environment Prize to the Stockholm Water Prize; Canada even named him Person of the Year in 1996.
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Cecilia Tortajada
Author: Cecilia Tortajada
Dr Tortajada is a leading international authority on urban water and wastewater management. She currently focuses on ensuring water future in terms of food, energy and environmental governance and ensuring water security through coordinated policies, which include water and natural resources management and water reuse. Dr Tortajada has advised major international institutions like FAO, UNDP, JICA, ADB, OECD, IDRC and GIZ, and has worked in numerous countries in Africa, Asia, North and South America plus Europe. She received the prestigious Crystal Drop Award and has been the only woman President of the International Water Resources Association during its 50 years of history. Dr Tortajada is currently a member of the OECD Initiative on Water Governance and juror for the Finnish Academy’s Euro One Million Millennium Technology Prize. She is also the Editor‐in‐Chief of the International Journal of Water Resources Development; Associate Editor of Water International; member of the Editorial Boards of the International Journal of Water Governance, Journal of Natural Resources Policy Research, and Urban, Planning and Transport Research Journal; as well as Editor of book series with Routledge, Springer and Oxford University Press. Cecilia has also authored and edited over 40 books by major international publishers. Her work has been translated into Arabic, Chinese, Farsi, French, German, Hindi, Japanese, Mongolian and Spanish.
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