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          Society

          Yangtze drought affects 5% of China's farmland

          (Xinhua)
          Updated: 2011-05-30 21:42
          Large Medium Small

          Yangtze drought affects 5% of China's farmland
          A fishing boat and a houseboat (background) lie stranded among fishing net poles at a dried-up portion of Honghu Lake, near Honghu city in Central China's Hubei province, May 29, 2011. [Photo/Agencies] 

          Shen Jianguang from Mizuho Securities said on Friday that he expects China's consumer price index (CPI), a main gauge of inflation, to grow by 5.7 percent year-on-year in May.

          In April, the CPI rose 5.3 percent from one year ago, well above the government's control ceiling of 4 percent.

          Inflationary pressure will continue into the second half of the year, due to a lingering drought that has been affecting several of China's primary agricultural regions, according to Sheng.

          The drought has increased the prices for crops, labor and electricity in these regions, Sheng said.

          Xie Taifeng, an economist with the Capital University of Economics and Business, said the drought might not only result in rising grain prices, but also disrupt transportation on the Yangtze River.

          Excessively low water levels in some channels on the Yangtze River have already caused several shipping vessels to become stuck, impeding the distribution of important industrial materials in the region.

          In Jiujiang, a port city located on the middle reaches of the Yangtze River in Jiangxi Province, water levels were five meters lower than the average level, forcing some shipping companies to unload their shipments early or even turn to moving the goods on land.

          Local authorities have warned that further water level drops in the Yangtze River might also threaten coal shipments from the north.

          Xie pointed out that the drought will also have a negative impact on the generation of hydroelectric power, which will aggravate problems that have already resulted from China's current power shortage.

          China's National Development and Reform Commission, the country's top price regulator, said Monday that it has raised prices of electricity for industrial use in some regions by about 20 yuan per 1,000 kilowatt-hours.

          HSBC announced last week that the preliminary purchasing managers index(PMI) for China, a gauge of nationwide manufacturing activity, dropped to a 10-month low of 51.1 in May.

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