Your Questions Answered: Extreme Heat in Asia and the Pacific

Workers in sectors such as agriculture, construction, or salt (pictured here) are at risk as rising heat prevents safe outdoor work. Photo by Truong Dinh Anh

Kathryn Milliken, a senior climate change specialist at ADB, is one of the authors of Extreme Heat: The Emerging Science and Its Implications for Asia and the Pacific, which brings together research on heat risks, their economic and social consequences, and how governments and investors can better prepare.

Across Asia and the Pacific, heatwaves are breaking records, disrupting harvests, forcing school closures, and pushing workers and communities to their limits. The people hit hardest are those with the least protection—and as temperatures keep rising, the gap between those who can adapt and those who cannot is widening fast.

What is extreme heat, and why does it matter?

Most of us think of heat as simply a high temperature reading. But extreme heat is more than that—and it does not even have to set records to cause serious harm. It refers to periods when the atmosphere holds unusually large amounts of heat energy, either as high temperature, high humidity, or both. That distinction is critical. In dry conditions, sweat evaporates quickly and cools the body. In humid conditions, the body’s ability to cool itself is impaired. That’s why a sticky 33°C afternoon in Manila or Dhaka—where high humidity can push the heat index, or “feels like” temperature, well above 45°C—can be more dangerous than a far hotter but drier day.

Scientists measure this combined stress using the wet-bulb globe temperature, which factors in air temperature, humidity, sunlight, and wind speed—essentially what the body feels, not just what the thermometer reads.

This matters because the numbers are already alarming—and many of the impacts come not from spectacular record-breaking days, but from the relentless accumulation of ordinary hot ones. Extreme heat does not affect everyone equally: risks vary by age, sex, pregnancy, disability, occupation, housing, and access to water, cooling, and health care. In 2020, three-quarters of the workforce in Asia and the Pacific were exposed to excessive heat, contributing to an estimated 10.5 million work-related injuries and illnesses.

In April 2024, nationwide school closures in Bangladesh, Cambodia, and the Philippines disrupted the education of more than 63 million children—such losses fall disproportionately on girls, whose schooling is more likely to be cut short permanently, and pile additional care burdens onto women at home. By 2030, the physical capacity for outdoor work in some parts of Asia is projected to fall by more than half from current levels. And many parts of the region are expected to see more than 40 days a year above 35°C—conditions that approach the limits of what the human body can cope with.

What happens to the human body in extreme heat?

The body works hard to stay cool. When it can’t, the consequences escalate quickly. Heat exhaustion sets in when the body struggles to keep blood flowing to provide oxygen and energy to working muscles and at the same time to the skin where it can cool—causing dizziness, nausea, cramps, and a rising core body temperature above 38°C. Left untreated, this can become heatstroke—a life-threatening emergency where the core temperature reaches 40°C or higher, the brain starts to malfunction, and organs can fail. 

The most extreme scenario is uncompensable heat: conditions so severe that the body generates more heat from normal activity than it can lose to the surrounding air. Core body temperature rises uncontrollably. No amount of shade, water, or rest can stop it. This is the hard physiological limit of human survival. Uncompensable heat has been recorded in parts of eastern Pakistan, northern India and Bangladesh, and eastern areas of the People’s Republic of China (PRC). Even with average global temperatures rising less than 1.5°C, most of Asia and the Pacific will experience such events. 

One finding that surprises most people: 91% of the dangerous heat exposures that injure and kill workers happen on ordinary hot days—not during declared heatwaves. Women are among the most exposed: pregnancy lowers the body’s tolerance for heat, women make up a large share of informal outdoor and agricultural labor, and those managing unpaid care work at home often do so in poorly ventilated spaces with no access to cooling or rest. There is also a less-visible compounding effect: the same weather conditions that generate extreme heat—high atmospheric pressure, low wind speeds, intense sunlight—also trap air pollution and wildfire smoke near the ground, amplifying health risks beyond what either heat or poor air quality would cause alone. 

Repeated exposure to heat causes cumulative harm. Agricultural workers across South and Southeast Asia are developing chronic kidney disease not from a single crisis, but from the build-up of small daily injuries to kidney tissue. Chronic heat exposure has also been found to accelerate biological aging at the DNA level, altering how genes behave in ways that outlast the heat event itself.

What does extreme heat do to our food?

Every step involved in getting food from farms to the table is exposed to extreme heat—and so is the water that sustains it all. Women and girls are at the center of this: as farmers, livestock keepers, fish processors, market vendors, and the household members who manage food, water, and nutrition.

In the field, high temperatures disrupt the flowering process, damage plant cells, and dry out soil faster than it can recover. India’s six worst food grain harvests all coincided with unusually hot and dry monsoon seasons. For smallholder farmers across Southeast Asia growing coffee, coconut, and cashews, even modest temperature increases translate into measurable yield and quality losses. A study of coffee farms across Southeast Asia found that every 1°C rise above a certain threshold reduced yields by around 8%.

Livestock is equally vulnerable. Heat stress reduces weight gain, fertility, milk production, and disease resistance—hitting the smallholder farmers who raise most of Asia’s cattle, buffalo, and poultry particularly hard. 

In the water, the picture is just as concerning. Warmer water holds less dissolved oxygen, stunting the growth of farmed shrimp and fish and increasing susceptibility to disease and harmful algal blooms that can make seafood unsafe to eat. Marine heatwaves are already causing mass die-offs in the Pacific: a single event in early 2023 left hundreds of dead fish, sea snakes, octopuses, and crabs washing ashore in Fiji, Kiribati, and Vanuatu. 

The systemic risk—what researchers call simultaneous breadbasket failure—is perhaps the most sobering finding. The probability of maize crops failing at the same time in Argentina, Brazil, India, the PRC, and the United States—the world’s five major growing regions—rises from 6% today to 54% at just 2°C of warming. When multiple breadbaskets fail together, international trade cannot compensate. Prices spike—and women and girls who most often absorb the shock, cutting their own consumption first, taking on more water and food collection, and facing rising pressure on household budgets.

What are the biggest impacts in terms of economy, industries, and livelihoods?

The clearest and most immediate impact is on labor. When it is too hot to work safely outdoors, less gets done—and the region’s economies are uniquely exposed. Small and medium-sized developing countries in Southeast Asia are projected to suffer labor productivity losses 1.5 times the global average, because they depend so heavily on agriculture, construction, and manufacturing done outdoors. 

Women in informal, agricultural, domestic, and market work face some of the highest heat exposure with the least access to workplace protection, cooling, or social safety nets—and as household incomes fall, unpaid care responsibilities, which fall disproportionately on women and girls, tend to increase. The countries projected to be worst affected before 2030 include India, Bangladesh, Thailand, Myanmar, Cambodia, and Lao PDR. 

But the economic damage goes beyond individual workers. Supply chains are disrupted. The PRC, for instance, is projected to face indirect losses of 0.5% of GDP from manufacturing supply chain disruptions caused by heat stress in supplier countries by mid-century. The effects ripple outward—reducing demand, driving up costs, and slowing growth. 

The El Niño-Southern Oscillation—the Pacific climate pattern that periodically drives extreme heat and drought across the region—already shows what sustained economic disruption from heat looks like. Research published in Science attributed $4.1 trillion in global income losses to the 1982–83 El Niño event, and $5.7 trillion to the 1997–98 event. Crucially, these losses are persistent—economies don’t snap back once the weather returns to normal. The damage compounds over time, just as in the human body.

The uncomfortable reality is that the systems we rely on—building codes, labor laws, infrastructure design standards, crop insurance—were designed for a climate that no longer exists. We are not adapted to the heat we have now, let alone the heat that is coming.

How Is Asia and the Pacific especially vulnerable to extreme heat?

No other region carries greater exposure to extreme heat, and the vulnerability runs through almost every layer of its development—from its geography and cities to its crops, farming calendars, and the workers who tend them.

Geography puts the region at the front line. The tropical and subtropical coastal cities of South and Southeast Asia—home to hundreds of millions of people—are precisely the areas where humid heat is projected to intensify most. Under 1.5°C of warming, for example, the climate of Shanghai could come to resemble today’s Karachi.  

Urban growth increases the risk. Cities already run 2°C to 8°C hotter than the surrounding countryside because of the urban heat island effect—the concentration of concrete, asphalt, and buildings that trap heat and limit the overnight cooling our bodies need to reset. An estimated 1.6 billion people in the region live in informal urban settlements, in homes built from materials that trap heat—tin, plastic, and plywood—often without reliable electricity, clean water, or access to cooling. 

The burden falls hardest on those with the fewest options: the elderly, young children, the homeless, and pregnant women. Women also make up a large share of informal and outdoor workers, often without access to cooling, shade, or occupational protection yet research shows that women’s organizations, community networks, and women workers themselves are often the most effective in designing and implementing local responses to heat.   

The region is also the world’s most disaster-prone—which matters because extreme heat rarely arrives alone. In mountain regions, glaciers that feed major river systems are melting faster, disrupting water supplies and increasing flood risk downstream. Coral reefs, which protect coastlines and support the fisheries that hundreds of millions depend on, are bleaching under warming seas. And tropical cyclones can trigger catastrophic compound events when the heat that follows a storm hits populations whose power has been knocked out.

There is also a troubling gap in the science itself. Climate models have been found to underestimate observed warming trends in Japan, the Republic of Korea, Indonesia, and parts of the PRC. Heat projections for some of the most populated parts of the region may already be too conservative. The risk is higher than the numbers suggest. 

How are ‘compound hazards’ changing the way we think about heat and disasters?

Compound hazards can exacerbate extreme heat events, an area that doesn’t get enough attention. We looked at how these events can interact with other hazards on two fronts: the timing—when extreme heat occurs with another hazard, either before or after—and the location, where extreme heat in one place coincides with another hazard somewhere else. 

Moreover, the atmospheric conditions that generate extreme heat—high pressure, stagnant air, intense sunshine—are the same ones that trap air pollution and smoke from wildfires near the ground, multiplying health risks.

One example brings this risk to life. After Hurricane Katrina’s deadly impact on New Orleans in 2005, millions evacuated ahead of its approach. More people died of heat-related illness during the resulting gridlock than from the storm itself. In Asia and the Pacific, the more common danger runs in the other direction: a cyclone makes landfall, knocks out power across a region, and a heatwave then strikes a population with no air conditioning and no way to cool down.

Extreme heat is no longer a distant risk to be modeled and monitored— it is already reshaping lives and livelihoods across the region. Decisions made today on buildings, labor protection, early warnings, and food systems will decide how many people are left exposed to a heat our world has never seen before.

This post was written with assistance from Professor Rob Wilby , Loughborough University and draws on analysis by Zonibel Woods, Senior Social Development Specialist (Gender and Development).

Picture of Kathryn Milliken

Kathryn Milliken

Senior Climate Change Specialist, ADB Climate Change and Sustainable Development Department

Reproduced from adb.org.

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The PRC’s Role in the Regional Flyway Initiative

Millions of migratory birds rely on the diverse landscapes of the People’s Republic of China (PRC) as they journey along the East Asian–Australasian Flyway. As part of the Regional Flyway Initiative (RFI), the PRC Government and ADB are working together to restore critical ecosystems and support long‑term ecological balance.

Transcript

Migratory birds, travelers in the sky. There are over 800 species of migratory birds in the People’s Republic of China, including more than 280 species of waterbirds and over 510 species of land birds.

They are a fundamental part of the web of life and are essential to maintaining ecological balance. Wetlands, forests, grasslands, and deserts are the homes they rely on for survival.

Each year, tens of millions of migratory birds journey across mountains, rivers, and oceans. A grand migration etched into nature’s rhythm. The PRC is one of the countries with the highest diversity of birds in the world, with vast terrain, complex topography, and varied climates. The PRC supports some of the richest natural environments in the world for birds.

The PRC sits at the intersection of four of the world’s nine major flyways. And with these important values comes a responsibility to protect birds and their habitats. Yet these breathtaking journeys grow ever more perilous. More extreme weather events and continuous human development are encroaching on bird habitats, leaving some of them under threat.

Global warming and the frequent occurrence of extreme weather have reduced the suitable habitat area for birds such as the Siberian Crane, leading to frequent food shortages. Consequently, large numbers of birds have moved to agricultural fields to search for food, which has triggered human-bird conflicts.

Habitats along all flyways continue to be lost or degraded from clearance, pollution, climate change and invasive alien species. Combined with the limited capacity for resource monitoring, the protection and restoration of migratory birds’ habitats are extremely urgent.

To protect biodiversity, it is important to foster harmony between humans and birds. Protect nature, positive governance, and practical conservation measures. Over 2000 protected areas have been established in the PRC, which partly cover some of the habitats used by migratory birds. Migratory bird sanctuaries along the coast of the Yellow Sea-Bohai Gulf of PRC have been inscribed on the World Heritage List.

The PRC officially launched an action Plan for the Protection and Restoration of Migratory Birds Flyways 2024 to 2030. Accelerating actions for a connected Conservation Framework. Restoring critical ecosystems and addressing the gaps in management and monitoring capacity.

To support migratory bird conservation, the PRC has launched a two-year project: Research on Protection and Restoration Policy of Migratory Birds, with support from the Asian Development Bank. 

The project is led by the National Development and Reform Commission, in close partnership with the National Forest and Grasslands Administration and Shanxi Forest and Grassland Bureau.

The project systematically evaluated the priority areas of the PRC’s conservation plans for migratory birds and their habitats. It identified conservation gaps, assessed the risks posed by global climate change to these flyways, and formulated plans to respond to global climate change.

The project is also part of an Asian Development Bank multi-country partnership, the Regional Flyway Initiative. This ambitious endeavor aims to conserve wetlands used by migratory waterbirds across the East Asian Australasian Flyway, spanning over 22 economies from the Northern to Southern hemispheres. 

The PRC’s Role in the Regional Flyway Initiative

Millions of migratory birds rely on the diverse landscapes of the People’s Republic of China (PRC) as they journey along the East Asian–Australasian Flyway. As part of the Regional Flyway Initiative (RFI), the PRC Government and ADB are working together to restore critical ecosystems and support long‑term ecological balance.

Transcript

Migratory birds, travelers in the sky. There are over 800 species of migratory birds in the People’s Republic of China, including more than 280 species of waterbirds and over 510 species of land birds.

They are a fundamental part of the web of life and are essential to maintaining ecological balance. Wetlands, forests, grasslands, and deserts are the homes they rely on for survival.

Each year, tens of millions of migratory birds journey across mountains, rivers, and oceans. A grand migration etched into nature’s rhythm. The PRC is one of the countries with the highest diversity of birds in the world, with vast terrain, complex topography, and varied climates. The PRC supports some of the richest natural environments in the world for birds.

The PRC sits at the intersection of four of the world’s nine major flyways. And with these important values comes a responsibility to protect birds and their habitats. Yet these breathtaking journeys grow ever more perilous. More extreme weather events and continuous human development are encroaching on bird habitats, leaving some of them under threat.

Global warming and the frequent occurrence of extreme weather have reduced the suitable habitat area for birds such as the Siberian Crane, leading to frequent food shortages. Consequently, large numbers of birds have moved to agricultural fields to search for food, which has triggered human-bird conflicts.

Habitats along all flyways continue to be lost or degraded from clearance, pollution, climate change and invasive alien species. Combined with the limited capacity for resource monitoring, the protection and restoration of migratory birds’ habitats are extremely urgent.

To protect biodiversity, it is important to foster harmony between humans and birds. Protect nature, positive governance, and practical conservation measures. Over 2000 protected areas have been established in the PRC, which partly cover some of the habitats used by migratory birds. Migratory bird sanctuaries along the coast of the Yellow Sea-Bohai Gulf of PRC have been inscribed on the World Heritage List.

The PRC officially launched an action Plan for the Protection and Restoration of Migratory Birds Flyways 2024 to 2030. Accelerating actions for a connected Conservation Framework. Restoring critical ecosystems and addressing the gaps in management and monitoring capacity.

To support migratory bird conservation, the PRC has launched a two-year project: Research on Protection and Restoration Policy of Migratory Birds, with support from the Asian Development Bank. 

The project is led by the National Development and Reform Commission, in close partnership with the National Forest and Grasslands Administration and Shanxi Forest and Grassland Bureau.

The project systematically evaluated the priority areas of the PRC’s conservation plans for migratory birds and their habitats. It identified conservation gaps, assessed the risks posed by global climate change to these flyways, and formulated plans to respond to global climate change.

The project is also part of an Asian Development Bank multi-country partnership, the Regional Flyway Initiative. This ambitious endeavor aims to conserve wetlands used by migratory waterbirds across the East Asian Australasian Flyway, spanning over 22 economies from the Northern to Southern hemispheres. 

What a 1,000-Year-Old Drainage System Teaches Us About Flood Risk

Ganzhou’s ancient Fushougou system offers a model of integrated, nature-based flood management for modern communities.

Introduction

As climate change intensifies extreme rainfall across Asia, cities are increasingly challenged by stormwater management, aging drainage infrastructure, and rising urban flood risk. Many urban drainage systems designed decades ago are now under stress due to rapid urbanization, expanding impervious surfaces, and more frequent high-intensity rainfall events.

Yet centuries before modern urban drainage engineering emerged, the city of Ganzhou in Jiangxi Province, People’s Republic of China (PRC), developed an innovative stormwater management system known as Fushougou. Constructed during the Song Dynasty nearly 1,000 years ago, the system combined engineered drainage channels, hydraulic control structures, and natural storage ponds into an integrated urban water management network closely linked with the city wall.

Historical accounts and local narratives often attribute Ganzhou’s long-standing ability to manage stormwater and reduce flood impacts to the Fushougou system, although detailed quantitative performance data remain limited. Its design reflects principles that resonate strongly with contemporary approaches to nature-based solutions (NBS) and sponge city development, particularly the integration of engineered drainage with natural storage and gravity-driven hydraulic systems.

As cities seek more resilient and adaptive flood management strategies, Fushougou provides a valuable historical example of how integrated water infrastructure can operate effectively over long periods.

A System Designed Around Natural Topography

Ganzhou lies at the confluence of the Gong and Zhang Rivers, which merge to form the Gan River. This geographical setting historically exposed the city to seasonal flooding during the rainy season. Annual rainfall in the region often exceeds 1,500 mm, with approximately 64% of runoff occurring between April and September, creating significant pressure on urban drainage.

To address these challenges, city planners during the Song Dynasty constructed the Fushougou drainage system to serve the southeastern and northwestern sections of ancient Ganzhou. The system covered approximately 3 km² and included more than 12 km of underground drainage pipelines, working in coordination with an approximately 8 km-long city wall.

Historical sources attribute the expansion and refinement of the system to Liu Yi, a water management specialist during the Northern Song Dynasty, who improved the connectivity and capacity of the drainage network.

The system relied entirely on gravity-driven flow, utilizing the natural terrain gradient of the city rather than mechanical pumping. By integrating drainage channels, hydraulic control structures, and surface water bodies, Fushougou functioned as a comprehensive water management network that managed stormwater, urban wastewater, and river flooding simultaneously.

Three key components formed the backbone of the system.

Key Components of the Fushougou System

1. Brick-lined drainage channels and pipelines

The primary infrastructure consisted of arched brick-lined drainage channels, designed for both structural stability and hydraulic efficiency. Larger channels reached approximately 0.9–1.0 m in width and 1.6–1.8 m in height, while smaller channels were covered with stone slabs.

One notable feature of the system is the depth of the pipelines, which in many locations extend roughly 2 meters below ground level. The deeper placement increased storage capacity within the network and reduced the risk of surface flooding during heavy rainfall.

Hydraulic performance was also enhanced through relatively steep channel gradients. For example, recent studies have identified a slope of approximately 4.25% near one of the system’s discharge structures. Such gradients produce relatively high flow velocities that help flush sediments and debris through the system, reducing blockages and minimizing long-term maintenance requirements.

In some sections, culverts narrow near discharge points, increasing flow velocity and helping to facilitate efficient outflow through the system’s outlets. These design characteristics demonstrate a strong understanding of hydraulic principles and the importance of self-cleansing flow velocities in urban drainage systems.

2. Water windows: Passive hydraulic control structures

The drainage network discharged through twelve outlets located along the city wall, known as “water windows.”

These structures functioned similarly to modern hydraulic check valves. Under normal river conditions, stormwater from the city could flow outward through the windows into surrounding rivers. In some locations, accelerated flow from narrowed culverts helped push the windows open.

However, when river levels rose during flood events, the increased external water pressure forced the openings closed, preventing floodwaters from flowing back into the city.

This passive hydraulic mechanism allowed the system to automatically respond to changing river levels without mechanical components or manual intervention. Such gravity-based and pressure-responsive controls represent a simple yet effective method for preventing backflow in flood-prone urban environments.

3. Interconnected storage ponds

Complementing the underground drainage network was a system of interconnected ponds located within and around the city. Historical accounts suggest that the system was linked to over one hundred ponds, forming a distributed storage network.

These ponds served multiple functions, including agricultural irrigation, aquaculture, and stormwater retention. Fish farming was commonly practiced, and nutrient-rich sediments accumulated in the ponds were reused in agriculture, forming a localized ecological cycle.

During heavy rainfall, the ponds acted as temporary storage basins, capturing excess runoff and reducing peak flows within the drainage system. Water could then be gradually released after storm events, helping to moderate downstream flood risks.

From a contemporary perspective, these ponds function similarly to decentralized stormwater detention and retention systems, which are widely used in modern sponge city designs. In addition to their hydraulic role, the ponds also supported microclimate regulation and aquatic ecosystems, demonstrating how water infrastructure can simultaneously deliver environmental and social benefits.

Long-Term Performance and Resilience

Historical records indicate that by the late 1960s approximately 12.6 km of the Fushougou drainage network was still functioning and serving an estimated 100,000 residents in Ganzhou’s old urban district.

Rapid urban expansion during the twentieth century led to the loss of many original components of the system. Today, only about 1 km of the original drainage network, along with two ponds and two water windows, remain intact.

Despite this partial loss, the surviving elements of the system continue to illustrate the durability of its design. The longevity of the infrastructure highlights several characteristics that contributed to its resilience:

  • Gravity-driven drainage, eliminating reliance on mechanical pumps
  • High hydraulic capacity relative to the scale of the historic city
  • Self-cleansing flow velocities that reduce sediment accumulation
  • Distributed storage through ponds, which buffer peak stormwater flows
  • Integration with natural terrain gradients

Together, these features demonstrate how urban water infrastructure designed around natural hydrology and passive hydraulic processes can remain functional for centuries.

Lessons for Contemporary Urban Flood Management

Although the historical context of Fushougou differs from that of modern megacities, several design principles remain relevant for contemporary urban flood risk management.

1. Integrating natural and engineered infrastructure

The Fushougou system demonstrates how engineered drainage can be combined with natural landscape features such as ponds and terrain gradients. This hybrid approach aligns with current nature-based solution strategies, which seek to enhance the role of natural systems in urban water management.

2. Multifunctional water infrastructure

The system simultaneously supported stormwater drainage, wastewater conveyance, irrigation, and aquaculture. Such multifunctionality is increasingly recognized as an important characteristic of sustainable urban infrastructure, allowing water systems to deliver environmental, economic, and social benefits.

3. Passive hydraulic design

The water windows illustrate how simple hydraulic mechanisms, including pressure-responsive closures and flow-accelerating channel design, can provide reliable flood protection without energy inputs or complex mechanical systems.

4. Designing for longevity and maintainability

The steep gradients and self-cleansing flow conditions of the drainage network reduced sediment accumulation and maintenance demands. Designing systems that can maintain hydraulic performance with minimal intervention is an important consideration for long-term infrastructure sustainability.

Picture of Xiaoyan Yang

Xiaoyan Yang

Principal Project Officer (Natural Resources and Environment), Agriculture, Food, Nature, and Rural Development Sector Office,

Reproduced from Asian Development Blog.

ADB, Luli Wood Sign Green Loan to Advance Circular Economy in PRC’s Forestry Value Chain

BEIJING, PEOPLE’S REPUBLIC OF CHINA (4 December 2025) — The Asian Development Bank (ADB) and Shouguang Luli Wood Inc. (Luli Wood) have signed a $50 million green loan (about CNY353.63 million) to support the construction of an oriented strand board (OSB) factory, associated facilities, and a captive biomass power plant, as well as to finance working capital needs in Jiangxi Province, the People’s Republic of China (PRC).

“Climate stability and healthy natural ecosystems are fundamental global public goods, and this project is a tangible example of how the private sector can be catalyzed to actively safeguard them,” said ADB Country Director for PRC Asif Cheema. “By championing a circular bioeconomy, we are not only reducing emissions and preserving forests but also setting a new benchmark for the forestry sector—demonstrating that commercial viability and environmental stewardship are mutually reinforcing.”

The supply of wood and raw materials in the PRC faces significant challenges, with only 1% of forests certified as sustainably managed. This is compounded by the heavy reliance on imported wood, which accounts for over half of the PRC’s demand. The wood panel market is dominated by plywood, which typically depends on large timbers, encouraging the logging of old and natural forests and the inefficient use of trees.

Luli Wood’s OSB production addresses these challenges. OSB is an engineered wood panel that does not use old-growth timber. It uses wood waste—such as branches and twigs—and small trees sourced from smallholder farmers, with about 10% of the inputs being fast-growing and sustainable bamboo. The waste generated from the OSB production is used as fuel by a biomass power plant, which generates the electricity and steam required to operate the factory.

ADB’s financing is verified as a green loan by ERM, a second-party opinion provider, in accordance with the Green Loan Principles.

The project is expected to reduce greenhouse gas emissions by around 200,000 tons of carbon dioxide annually, create 1,500 jobs, and provide additional income for thousands of smallholder wood suppliers. The project also incorporates a gender action plan that will increase women’s inclusion across Luli Wood’s value chain, operations, and workplace.

“Partnering with ADB is a powerful endorsement of our vision,” said Luli Group Vice Chairman Xue Mingliang. “We have built a fully integrated, green supply chain—from sustainable forestry to finished homes—and are committed to setting a new standard for the industry. This collaboration is a pivotal step in our journey to becoming an international company in sustainable wood processing.”

Established in 2001, Luli Wood is a subsidiary of the diversified Luli Group and one of the largest OSB producers in the PRC. The company holds chain-of-custody certifications from both the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC). These certifications ensure traceability and responsible sourcing from forest to finished product, validating that raw materials originate from certified forests or recycled materials. Luli Group is ranked among the top 500 private companies in the PRC.

ADB is a leading multilateral development bank supporting inclusive, resilient, and sustainable growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.

Reproduced from ADB.org. 

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