Half of China’s GDP at risk of climate-related disaster by 2050

China’s biggest economic powerhouses, including Jiangsu and Shandong provinces, will be the most vulnerable places in the world to climate risks amounting to trillions of dollars in 2050, according to new research.

Nine of China’s provinces – accounting for more than half of the nation’s GDP – take up the top nine spots on a list of the states and provinces around the world that are most likely to suffer as natural disasters related to climate change become more extreme and frequent, putting lives and assets at risk, South China Morning Post reports.

The list, released on Monday by Cross Dependency Initiative (XDI), a Sydney-headquartered climate-change research firm, has 26 of China’s provinces in its top 50.

The analysis, titled “Gross Domestic Climate Risk”, calculated the physical climate risk to the built environment from hazards including flooding, extreme heat, forest fires, extreme wind and freezing-thawing cycles, evaluating 2,639 territories around the world.

Eighty per cent of the top 50 most at-risk states and provinces are in China, the United States and India, according to XDI. The ranking also showed that most of the states and provinces at highest risk of climate disaster are also economically crucial locally and globally.

“The Gross Domestic Climate Risk ranking underscores the importance of pricing physical climate risk in financial markets,” said Rohan Hamden, CEO of XDI, at an online press briefing last week.

“The vulnerability of global supply chains and the need for climate resilience to inform investment are crucial for companies, governments and investors to understand the financial and economic impacts of physical climate risk, and weigh this risk in their decision-making – before these costs escalate beyond financial tipping points.”

China’s high-risk provinces are concentrated in the globally connected east and south, along the floodplains and deltas of the Yangtze and Pearl Rivers.

The two most vulnerable provinces in the world, Jiangsu and Shandong, are also two of the country’s key economic engines, each of which has a relatively diverse economy worth over US$1 trillion.

In addition to Shandong and Jiangsu, the provinces of Hebei, Guangdong, Henan, Zhejiang, Anhui and Hunan, and the municipality of Shanghai make up the top nine, which together accounted for more than half of China’s total economic output in 2022.

The provinces top the ranking because they are large; host extensive industrial, trade, residential, and commercial development; and are exposed to coastal sea level rise and river and surface flooding, according to XDI.

Jiangsu’s highly developed economy is based on irrigated agriculture, finance, technology, education and tourism. In addition to frequent typhoons, the coastal province in the Yangtze River Delta has recently witnessed significant flooding that has impacted millions of people and hindered agricultural output, although China has made large investments in the construction of river floodgates and coastal barriers.

With a population of over 100 million, Shandong province, on the Yellow River, has the third-largest GDP among provinces in China and is a significant hub for both agriculture and industry. Like much of eastern China, Shandong is subject to frequent flooding. Several catastrophic flooding events have occurred this century, including in 2022, against the backdrop of an overall drying trend.

Guangdong, on the Pearl River Delta, is the biggest provincial economy in China by output and population. It is home to 126 million people and hosts the Pearl River Delta Economic Zone and multiple globally significant ports on the South China Sea. Extreme flooding in Guangdong in 2022 caused an estimated 7.5 billion yuan (US$1.1 billion) in direct economic losses, according to the state-run China Daily.

According to XDI, extreme weather events in these regions are projected to intensify in the coming years. The United Nations’ Intergovernmental Panel on Climate Change has called Guangzhou, the capital of Guangdong, “the most economically vulnerable city in the world” to sea-level rise by 2050.

The countries on the list need to acknowledge and disclose their physical risks, take immediate and effective measures to adapt and take climate risks into consideration when making investment decisions, XDI said.

“Even now, the best adaptation strategy is to reduce carbon emissions …,” Hamden said. “We’re already feeling the significant impacts of weather events around the world, and they will only increase.”