On Tuesday, China’s central bank announced it will provide an additional 100 billion yuan ($14 billion) to banks to support the rebuilding of areas affected by recent floods, which have damaged approximately 6 million acres of crops. The country has faced severe weather events, including Typhoon Gaemi, record rains in southern rice fields, and intense heat waves in northern corn and wheat regions.
Vice Premier Liu Guozhong has emphasized the need for a bumper harvest this autumn, prompting the People’s Bank of China (PBOC) to issue a re-lending facility aimed at supporting flood prevention and reconstruction initiatives in 12 affected areas. The funding will be directed towards provinces such as Fujian, Guangdong, Henan, Heilongjiang, Hunan, Jilin, Jiangxi, Liaoning, Shaanxi, and Sichuan, as well as the megacity of Chongqing and the Guangxi region. It will assist farmers, small and micro-sized firms, and households.
The PBOC has previously issued 2.61 trillion yuan in re-lending quotas to support agriculturalists and small businesses. The central bank stated that it would encourage its branches to effectively utilize the new re-lending quotas to meet the funding needs of disaster-stricken enterprises and aid in their recovery.
According to the Ministry of Emergency Management, China experienced 76.9 billion yuan ($10.1 billion) in economic losses from natural disasters last month, with 88% attributed to heavy rains and floods—the highest losses recorded for July since 2021. The recent disasters have affected nearly 26.4 million people, resulting in 328 casualties, over one million relocations, and significant damage to homes and crops.
Producers from countries such as the U.S., Brazil, and Indonesia are closely monitoring the situation, as a reduction in domestic agricultural output could lead to increased food imports by China, impacting global food supply and prices. Beijing aims for 92% self-sufficiency in staple grains and beans by 2033, up from 84% during 2021-2023, but the rising frequency of extreme weather events poses challenges to this goal.