Adv 1 – Leadership
Water Impact – Chinese stability
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- Food shortages topple the regime and causes mass social instability Inkerman Group 11
Water Impact – Chinese stabilityWater scarcity collapses Chinese food production John Johnston 11, writer for the 9 billion, “Can the sea solve China’s water crisis?”, February 15, http://www.the9billion.com/2011/02/15/can-huge-desalination-plants-solve-chinas-water-shortage-crisis/ In case you missed it, China is currently in the throes of its worst drought in 60 years, and has announced a billion dollars worth of emergency water aid. The harvest of the world’s biggest wheat producer is threatened, and China is saying it will use grain reserves to reduce pressure on global food prices, which have been at record highs. Floods in Australia and dryness in Russia are said to be at the root of global food price escalation. Food shortages topple the regime and causes mass social instability Inkerman Group 11 The Inkerman Group is an international business risk, intelligence and investigation consultancy, which takes an intelligence-led approach to the issue of threat mitigation. The company’s philosophy is based on the fact that businesses have a responsibility for protecting their most valuable assets from both actual and potential threats and that each business has its own set of unique challenges http://blog.inkerman.com/index.php/2011/02/22/chinese-weather-with-global-breadbasket-implications/ The crisis in the wheat-producing provinces of Eastern China, which includes Shandong, Henan, Hebei, Anhui, Shanxi, Shaanxi, Gansu and Jiangsu provinces, comes after only 0.5 inches of rain have fallen in the province since September 2010, causing domestic wheat prices to rise and the price of flour to increase by 8%. Observers are keeping a close eye on whether China will be forced to begin importing wheat and what that means for the Chinese peoples’ ability to buy a basic food stuff as well as what this will do to the global market price of wheat which has already risen 35% since November 2010. The crisis which is affecting 2.6 million people and has also hit 2.8 million livestock is being referred as “weather with global breadbasket implications”. The crisis also comes at an even more pressing time, as a plethora of protests over the increase of commodity prices coupled with the call for human rights reforms, sweep across North Africa and the Middle East. This is something which China is more than acutely concerned about and will try every measure to prevent it from affecting its own populous, including heavily censoring internet searches for key words such as “Egypt”, “Tunisia”, “Libya”, “Bahrain” and “food price protests” as a result. Last week the World Bank, in its Food Price Watch, warned that that food prices have “hit dangerous levels” that could contribute to “macro vulnerabilities” including political instability. Even as senior Chinese officials exhort local officials to do everything possible to cope with a severe drought in the country’s wheat belt, the government is trying to reassure the public that food prices will not rise any further. Prime Minister Wen Jiabao assured the public in televised remarks late last week that the supply and demand of grain were “basically” in balance and that large stockpiles were available. China’s drought-control headquarters posted a statement on its Web site on 20 February 2011, which described conditions as “grim” across a wide area of the wheat belt in Northern China and called for emergency irrigation efforts. However, agricultural experts say it is too early to assess the damage to the wheat harvest, as it remains within the winter months now, which it is typically drier anyway, and normal seedlings would normally still be alive awaiting the spring bloom. If the weather turns warmer and there is still no rain, then the real fear is that the Chinese will not be talking about lower agricultural production, but rather zero production, because the seedlings will all be dead. Beijing’s plan includes measures to divert water, build wells and other efforts to help drought-stricken areas of central and northern China, such as offering emergency subsidies of US$9 to US$11 an acre to help farmers pay for irrigation, but many analysts claim these measures are too little too late and that there is a real possibility for mass social unrest if the very basic of food stuffs for the people cannot be provided. China has essentially been self-sufficient in grain for decades, as the necessity to feed 1.3 billion mouths has made food production of wheat a security priority since 1949. However, the need to import wheat in volume is also creating shortages elsewhere in the world. Wheat futures prices have already risen 47% in a year, buoyed by a series of weather events including drought and fires in Russia, flooding in Australia, Pakistan, Europe, North America and Argentina, and perhaps most importantly rising Asian demand for the commodity. The emerging situation in China is expected to push prices higher. Shandong faces its worst drought in 200 years and greater Beijing remains without any rain for almost 100 days. To compound matters, vital emergency irrigation efforts are on hold because of a cold snap which means that officials are advising farmers not to water their crops, because the temperature is too low. One interesting approach to the crisis was seen in Wuwei when meteorologists fired artillery shells and truck and aircraft-mounted rockets loaded with the cloud-seeding chemical silver iodide into the atmosphere which produced light snow and minimal rain. According to State Media, it reportedly “produced one-tenth of the drought-stricken area with adequate moisture for now”. It is more than likely that this was a publicity stunt in order to reassure the populous that the government was acting in their best interests to try every alternative to make rain. Its ability to yield positive results in mass quantities remains questionable however, but as African tribes have known for a millennia, prayers and tribal dances alone cannot bring about the rains, and as a result the waiting game for the precious blue gold continues for China. It remains the world’s largest wheat grower and as such the pressure on its ability to account for one-sixth of the world output will now be tested to the limit. In 2011, Beijing’s top priority is to fight inflation. Food accounts for a third of China’s consumer price index which is the main barometer for the inflation figures, this inability to grow any crops for its main east coast financial and populous centres; Beijing, Tianjin, Nanjing, Shanghai and Xiamen will not go unnoticed and as a result China’s leadership appears to have become alarmed by the slow response to the crisis. Moreover, the longer it continues the greater the likelihood of social unrest occurring. Without a quick response, or realisation that China is the most susceptible it has ever been to global price rises for food, it may prove to be an unhappy and hungry start to the Year of the Rabbit. 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