Central China Hit by Drought, as Reservoirs Become ‘Dead Water’

BEIJING — A severe drought along the Yangtze River region in central China has rendered nearly 1,400 reservoirs in Hubei Province temporarily unusable, devastated farm fields and made drinking water scarce, according to a report on Monday by Xinhua, the state news agency.

The drought, which has lasted for five months, has brought water levels in the middle part of the Yangtze to a near-record low. For the second time since the Three Gorges Dam, the world’s largest hydroelectric project, began operating, officials have had to make emergency water discharges from it to help ease the drought.

As of Sunday, 4 medium-size reservoirs and 1,388 small reservoirs in Hubei had dropped below the allowable discharge levels for irrigation, the official Xinhua News Agency reported, citing the director of the reservoir management office for the Hubei Provincial Water Resources Department. One-fourth of all small reservoirs had what officials called “dead water” remaining, which could be pumped for use only in an emergency.

The drought adds to concerns over the effect that a gargantuan water-diversion project will have on the central provinces of China. The project, called the South-North Water Diversion, is supposed to move water from the Yangtze and its tributaries north to Beijing along a canal, and to Tianjin along an eastern route.

Both routes are supposed to be fully operational within the next couple of years. Criticism of the project has become widespread, and many people along the Yangtze and in the south say precious water resources should not be sent north, where there has been a chronic water shortage.

The water on the middle route is supposed to flow from the Danjiangkou Reservoir in Hubei. The water level at the reservoir was measured at 443 feet on Saturday, about 13 feet below the level at which the water is considered dead, Xinhua reported.

Du Yun, a geography scholar at the Chinese Academy of Sciences in Wuhan, the capital of Hubei, said in an earlier interview that the central government had not done enough studies to assess the impact of the diversion project, especially when compared with all the research that was done before the building of the Three Gorges Dam.

“For that project, the preliminary discussion and studies phase was decades long,” he said. “There was the participation of institutions and experts from across China. Compared to that, this water diversion project did not do as comprehensive a preliminary study as the Three Gorges project did.”

As of Saturday, the drought had left 315,000 people and 97,300 head of livestock in Hubei short of drinking water, and more than two million acres of farmland had been affected, Xinhua reported. In neighboring Henan Province, the drought had affected at least 320,000 people.

Officials discharged 400 million cubic meters of water from the Three Gorges Dam from May 7 to May 11, according to Wang Hai, a spokesman for the dam’s construction and operation management bureau, Xinhua reported on Thursday.

This discharge is aimed at fighting the current drought and raising levels of the Yangtze to aid shipping. People in the city of Yichang, where the dam stands, have been hit especially hard. They say they have had to buy water rather than relying on water from their land.

The water levels in the section of the Yangtze between Yichang and Jiujiang in Jiangxi Province were about 8 to 18 feet lower than average, Xinhua reported, citing a statement by the Hubei provincial flood control and drought relief headquarters.

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Sarkozy Backs Italian Official to Lead Central Bank

 

President Nicolas Sarkozy of France said he would support a respected Italian monetary official, Mario Draghi, to succeed Jean-Claude Trichet when he steps down later this year. Mr. Sarkozy made his unexpected announcement at a joint news conference in Rome with Prime Minister Silvio Berlusconi of Italy.

But in the political brinksmanship common with appointments at top European institutions, Mr. Sarkozy’s move may have made it harder for Chancellor Angela Merkel of Germany to endorse Mr. Draghi.

Germany’s finance ministry, led by Wolfgang Sch?uble, has recently warmed to the idea that Mr. Draghi is the best-qualified person for the job. But Mrs. Merkel faces a delicate task in preparing German voters for the prospect of an Italian’s having responsibility for keeping European inflation under control and managing the fate of the euro.

Mr. Sarkozy, though, expressed no such reservations.

“France will be very happy to support an Italian for the presidency of the E.C.B.,” he said. “I know Draghi well. We support him not because he is an Italian but because he is a man of quality.”

Mr. Sarkozy made the announcement without consulting Mrs. Merkel, according to a German official who insisted on anonymity.

The European Central Bank’s role in fighting inflation is a major preoccupation for Germany, and Mrs. Merkel retains an effective veto over the appointment, which is scheduled to be decided at a summit in June.

Mrs. Merkel had been hoping that an inflation-fighting German, or a banker from a North European country, would take the helm from Mr. Trichet, who is retiring in October. But her preferred candidate, Axel A. Weber, the former president of the German central bank, took himself out of the running earlier this year. Mr. Weber resigned from the Bundesbank in February.

Mr. Weber’s exit pushed Mr. Draghi’s candidacy to the forefront, despite widespread perceptions, particularly in Germany, that people from Mediterranean countries are not as prudent and responsible with money as those from northern nations.

Despite that stereotype, in the corridors of finance Mr. Draghi, governor of the Italian Central Bank, is widely respected as an experienced economic policy maker with sterling credentials and a knack for navigating turbulent political waters.

But Mr. Sarkozy’s announcement, by appearing to pre-empt Mrs. Merkel, could complicate the process of selecting the next central bank president.

Mr. Sarkozy’s remarks were all the more surprising because both he and Mrs. Merkel have sought to forge a closer relationship to keep the euro from unraveling amid the debt crisis.

They have also worked to overcome differences in their approaches to the central bank. Germany wants to keep the bank free from politics, while France, according to German officials, is more interested in influencing it.

It is not the first time Mr. Sarkozy has bewildered a crucial European partner by announcing policy without giving advance notice. But French officials insisted that they had been encouraged to support Mr. Draghi after Mr. Sch?uble appeared to endorse him; they expect Mrs. Merkel to ultimately support him as well.

In return, France expects Germany to back a Frenchman for the seat that Mr. Draghi would vacate on the bank board, said senior French officials who spoke anonymously because of the political sensitivity of the matter.

Mr. Draghi has a reputation as a consensus builder — an important skill when running a central bank. Mr. Weber dropped out of the running in part because he was out of step with other members of the bank’s policy-making committee.

Mr. Draghi, serious and direct, is also acutely sensitive to Germany’s preoccupation with fighting the specter of inflation, and has spent the last few months underscoring his inflation-fighting credentials. In a rare interview in February, he said monetary policy should “first and foremost be geared toward price stability.”

The central bank recently raised interest rates by a quarter percentage point, a move Mr. Draghi supported. Analysts expect the bank to lift rates perhaps twice more this year.

That policy has come under fire from some experts who warn that higher rates will choke off the faltering recovery in some countries. But Mr. Draghi’s firm position on inflation has helped endear him to Mr. Sch?uble, the German finance minister. He sees Mr. Draghi as someone who can guide a strict fiscal and monetary policy while keeping meddling politicians at bay, according to a German finance official, who spoke on condition of anonymity because he is not authorized to speak on the record.

Mr. Sch?uble also holds the view that choosing a central banker from a southern European country would send a good signal to its troubled neighbors, the official said, because it might show that the politics and economics of the 17-member euro zone are not driven by northern countries alone.

If Mr. Draghi got the job, he would have to navigate the tricky financial and political imperatives of bailouts for the most stricken European countries. He would also have to weigh how much support the central bank can and will continue to give to troubled banks in countries like Ireland and Spain.

Mr. Draghi seems to have managed to overcome reservations about his role as a managing director at Goldman Sachs from 2002 to 2005. The investment bank was the lead manager for a 2001 derivatives transaction that allowed Greece to dress up its books in a way that brought it into the euro club, but Mr. Draghi has made clear that he was not directly involved.

On another monetary policy issue, Mr. Draghi has discreetly voiced concern about the central bank’s continuing intervention in markets for European government bonds. He emphasized that intervention was justified only to make sure that the bank maintained its influence over interest rates, and not as a form of economic stimulus or stealth financing for overindebted governments.

Judy Dempsey reported from Berlin and Liz Alderman from Paris. Katrin Bennhold contributed.