China Sustainability: El Niño on climate, food and power

We examined historical El Niño impact on China's climate, agriculture and power sector, comparing the 2015-16 and 2023-24 episodes with outlook into 2027. Our main conclusion is that forecast warmer conditions and increased rainfall in parts of southern China could benefit selected hydropower assets, while the historical evidence shows no clear, consistent link to broad food inflation in China. China Power's downstream Yuan River assets offer our preferred hydro exposure among the three covered hydro companies. This report complements the Global ESG team's ongoing physical risk series. The National Climate Center confirmed on 9 October that a very strong El Niño had formed in September and expects a peak in late autumn or early winter, with rainfall 50-80% above normal in Jiangnan and eastern Southwest China, a warmer and wetter winter, and a weakening event ending in spring-summer 2027. El Niño alone does not reliably forecast higher national food inflation, and domestic staple supply