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Emma Ma

Frank Chen

With climate change unleashing more frequent extreme weather events and heightening the risk of casualties and infrastructure damage nationwide, Chinese authorities have stepped up funding to address the challenge, though ageing dams and cash-strapped local coffers pose challenges, according to analysts.
“The central government has ramped up funding for natural disaster prevention over recent years. While the policy partly serves to stabilise employment, its core priority lies in flood control amid rampant extreme weather events,” said Ma Jun, founder of the Institute of Public and Environmental Affairs, a Beijing-based environmental research organisation.
Central government fiscal transfers to provincial authorities for water conservancy infrastructure – the networks of dams, dykes and reservoirs that manage water flow – were set at 44.77 billion yuan (US$6.6 billion) this year, about the same as last year’s level, according to the Ministry of Finance.
These funds would be critical because dozens of China’s existing reservoirs and dams were built at least 60 years ago, Ma said. “Authorities need to allocate fiscal funds for retrofits of these ageing facilities alongside new dam projects,” he added.
A dedicated pool of funding had also been reserved for urban flood control initiatives, with Beijing drastically boosting spending on underground pipeline construction and retrofits. A total of 160 billion yuan raised from this year’s ultra-long special treasury bonds – sovereign debt instruments with maturities of up to 50 years to fund major national projects – would be fully allocated to these projects, marking a 25 billion yuan increase from last year.
Underground pipelines have long been a weak point in efforts to tackle urban flooding. According to the Ministry of Housing and Urban-Rural Development, 30 per cent of existing urban drainage pipelines had been in service for more than 20 years, with some for over 40 years.
China’s capacity to tackle and handle extreme weather events and overall resilience has grown
Rui Meng, China Europe International Business School
In a March article on climate change, Wu Nongdi, deputy director of the Development Research Centre of the Ministry of Water Resources, wrote that “floods and droughts are growing more sudden, erratic and unpredictable in China, which has raised higher standards for flood control infrastructure and urban flooding control”.
The push for these measures stemmed from a series of devastating floods in recent years in major metropolises. In 2025, heavy rainstorms hit Beijing, resulting in 44 deaths and nine people missing. In the summer of 2021, flash floods hit Zhengzhou, the capital of central China’s Henan province, causing 398 deaths or missing persons. Direct economic losses reached 120 billion yuan.
In the wake of these disasters, local authorities and private investors, backed by central fiscal support, continued to pour capital into flood mitigation. Between 2022 and 2025, their combined annual investment in water conservancy projects exceeded 1 trillion yuan (US$147.49 billion), according to data from the Ministry of Water Resources, with 27 major projects breaking ground nationwide last year.
Over the next five years, that investment is poised to surpass the 7 trillion yuan threshold, according to the National Development and Reform Commission.
“These substantial investments will undoubtedly bear fruit, especially in prevention, early warning, emergency response as well as a better mobilisation system,” said Rui Meng, a finance professor at the China Europe International Business School in Shanghai.
“China’s capacity to tackle and handle extreme weather events and overall resilience has grown.”




Hong Yunyin, a member of the Shanghai Z-Care Emergency Rescue Team who has taken part in numerous flood rescue operations, said urban drainage efficiency had improved significantly over the years.
“During our rescue missions, urban floodwater drainage has become more efficient. Back then, even in a city like Shanghai, standing water would linger for two to three days before receding. Now floodwaters can clear after 24 hours,” Hong said.
“The real weak link lies in rural areas and suburban outskirts, which require more funding to upgrade drainage pipeline networks.”
But funding future construction could face significant structural hurdles.
“Fiscal investment remains the primary funding channel for water conservancy construction, yet its growth momentum has weakened. Against a backdrop of mounting local government debt and a sluggish property market, the stability and sustainability of fiscal investment are now facing challenges,” wrote Wu of the Development Research Centre.
Data from the China Water Statistical Yearbook by the Ministry of Water Resources showed that between 2011 and 2024, about 77 per cent of total investment in water conservancy projects came directly from central and local governments. Bank loans accounted for only about 12 per cent, and private capital just 10 per cent.
“The existing financing pattern can hardly meet the urgent demand for large-scale, long-term and low-cost capital needed for the high-quality development of water conservancy infrastructure,” Wu wrote.


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Chinese authorities have ramped up spending on disaster prevention in recent years, but some worry local debt levels could hinder the campaign


Chinese authorities have ramped up spending on disaster prevention in recent years, but some worry local debt levels could hinder the campaign.


China has poured funding into flood defences. Has the investment paid off?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Chinese authorities have ramped up spending on disaster prevention in recent years, but some worry local debt levels could hinder the campaign

Chinese authorities have ramped up spending on disaster prevention in recent years, but some worry local debt levels could hinder the campaign