High time to reduce costs of floods

Indeed, a longer-term Keynesian stimulus can boost post-flood construction support repairs and rebuilding. If 1998 is any indication, July and August could suffer adverse impacts, which could be offset by a rebound in September.

Recurring floods increase the vulnerability of the poor, particularly small farmers. Since the 1998 floods, there has been great progress in adaptation to weather shocks, while government subsidies support agricultural insurance in China. Moreover, climate adaptation has been incorporated into the national agriculture development program.

Yet reinforcing agricultural resilience is like trying to repair a plane's engine after the take-off. With weather shocks becoming increasingly severe, agricultural insurance premiums are soaring and national initiatives have to cope with adverse global trends.

In addition to agricultural resilience, sustainable urbanization would go a long way not just to support adaptation but also to contribute to mitigation.

To fight flooding and mitigate its costs, the government is conducting sponge city pilots in some 16 major urban centers, including Beijing and Shanghai. The goal is to retrofit existing drainage systems or build sponge cities, which can control floods and conserve water.

Adaptation can only respond reactively to adverse effects. In contrast, mitigation can proactively reduce the costs of extreme weather events. That requires sustainability, especially sustainable building construction, climate change mitigation, agricultural resilience－and sponge cities.

Necessity is the mother of invention. As extreme weather events are becoming a more habitual phenomenon, China is likely to pioneer bold and ambitious experiments toward sustainable economic development.

The author is a guest fellow at Shanghai Institutes for International Studies.