China is currently is on the verge of a devastating heatwave that could have a severe impact on its economy, according to the chief economist of Hang Seng Bank China.
The heatwave “is a quite dire situation,” Dan Wang told CNBC’s “Squawk Box Asia” on Thursday, adding it probably could last for the next “two to three months easily.”
China is facing all-time high heat waves and is grappling with a power outage in the Yangtze River area. Extreme temperatures have disrupted crop growth and threatened livestock.
“It will affect those big energy-intensive industries and it will have [a] knock-on effect throughout the economy and even to the global supply chain,” she said.
“We already see a slowdown in production in the steel industry, in chemical industry, in fertilizer industry. Those are very important things when it comes to construction, to agriculture and also to manufacturing in general.,” Wang added.
According to a state media report, most areas of the Yangtze River basin have seen extremely high temperatures since July. Rainfall in the area fell about 45% compared to the average over recent years, based on data from the Ministry of Water Resources.
