Urban flooding is an increasingly pressing threat, capturing the attention of researchers and policymakers alike. Conventional flood studies have primarily targeted local, direct damages—physical destruction of infrastructure, housing, and capital assets—often treating affected cities as isolated entities. This approach, while important, overlooks the intricate and far-reaching consequences that arise from the interconnectedness of modern urban economies, particularly the cascading effects through complex supply chains. A groundbreaking study by Fang, Xu, Jin, and colleagues has now bridged this critical gap by pioneering a multiregional input-output model specifically designed to analyze flood impacts across 306 Chinese cities. Their research dives deep into the nonlinear economic losses triggered by floods of varying severities, revealing systemic vulnerabilities that extend well beyond the flooded zones themselves.
The study innovatively combines hazard data on flood frequency and intensity with economic modeling to capture both direct and indirect losses across multiple regions. Rather than stopping with the direct capital damages typically accounted for in flood risk assessments, the researchers incorporate indirect economic effects by tracking disruptions in supply chains that ripple through and beyond the flooded cities. This method affords a nuanced understanding of flood impacts that differentiates local-indirect losses—economic losses in the flooded city attributable to interrupted local production—from ripple losses in nonflooded cities where industries rely on the affected urban centers. To quantify these far-flung repercussions, a newly devised spillover indicator was introduced, which measures passive losses borne by nonflooded cities due to cascading supply disruptions.
One of the most striking revelations from this study is the nonlinear relationship between flood return periods and the nature of economic losses. For relatively frequent but low-intensity floods, direct capital losses dominate, primarily reflecting repair and replacement costs for damaged infrastructure. However, as flood events become rarer and more extreme, indirect losses within the flooded city become substantial and surpass direct losses. This transition signals a shift in flood impacts—from a focus on tangible destruction to more complex economic cascades that reverberate through disrupted production and labor markets. The economic toll from these indirect effects is particularly pernicious given its delayed manifestation and potential for systemic amplification.
Spatial disparities in flood damages also emerge as a major theme in the study, shedding light on the heterogeneous vulnerabilities of cities across China. Wealthier, economically advanced cities experience larger absolute losses, an expected outcome given their dense concentration of capital assets and infrastructure. However, when losses are measured as a proportion of gross domestic product (GDP), wealthier cities tend to endure lower impacts relative to their economic size. By contrast, less affluent cities— characterized by fewer capital assets but vulnerable labor-dependent industries—suffer higher proportional losses, especially through disruptions to workforce productivity. This differential points to underlying inequalities in urban resilience and suggests that flood adaptation measures must be carefully tailored to the socioeconomic compositions of individual urban areas.
The study’s findings underscore the critical role of major urban hubs as epicenters for systemic risk propagation. Spillover impacts concentrate disproportionately in these central cities, magnifying economic ripple effects far beyond localized flood events. This spatial concentration of vulnerability is compounded by the integral positions these hubs occupy within complex supply networks, serving as both production centers and essential nodes for distribution. Accordingly, disruptions in one hub can cascade through the broader regional and national economic landscape, amplifying risk and potentially triggering compound crises.
Significantly, the researchers also explore the implications of their findings for stress-testing frameworks designed to enhance urban resilience. Aggregating individual city-level flood stress tests, as often practiced, is shown to yield conservative lower bounds of economic losses. In other words, conventional stress tests may underestimate the true cascading risk by failing to capture cross-city interdependencies and simultaneous shocks. To illustrate this, the study presents a co-shock scenario for the Yangtze River Delta—a megaregion comprised of highly interconnected cities—showing substantial amplification in overall economic losses when city shock events occur concurrently. This finding highlights the urgency of adopting multiregional, integrated decision-support tools in urban flood risk management.
From a technical standpoint, the study represents a formidable advance by coupling geospatial flood hazard modeling with a sophisticated multiregional input-output framework, encompassing six different flood return periods ranging from frequent to rare extreme events. The model partitions losses into direct capital damages, local-indirect output losses, and ripple effects, thus capturing multiple economic dimensions often missing in traditional assessments. This level of granularity enables researchers and policymakers to identify sector-specific vulnerabilities and tailor adaptation strategies across both space and economic activity. By explicitly integrating labor-related losses alongside capital stock disruption, the research paints a fuller picture of flood impacts on urban economies.
Importantly, the research calls attention to the systemic nature of urban flood risk in the modern interconnected economy. Floods no longer operate as isolated events confined to single cities, but rather as catalysts for complex phenomena spanning geographical and sectoral boundaries. This paradigm shift in understanding necessitates a concurrent evolution in flood risk science and policy. The newly developed spillover indicator, for instance, could become an essential metric within regional planning exercises and insurance modeling, improving anticipatory governance that accounts for indirect and passive flood-induced losses.
Moreover, the study’s granularity facilitates the identification of resilience priorities. Cities with larger local-indirect losses may prioritize strengthening labor markets and ensuring supply chain continuity, while wealthier hubs might focus on infrastructure hardening against capital asset damage. Coordination among cities especially within megaregions like the Yangtze River Delta emerges as paramount, bolstering collective recovery capacity and minimizing systemic economic shocks. These insights will likely inform forthcoming updates in urban disaster preparedness, risk financing, and post-flood recovery frameworks.
In a world increasingly shaped by climate change and urbanization, the economic risks posed by urban flooding grow more acute and complex. This study’s comprehensive approach offers a crucial template for other regions grappling with similar vulnerabilities worldwide. The ability to parse direct and indirect costs spatially and temporally represents a significant leap toward predictive flood risk modeling that embraces the full spectrum of urban economic interdependencies.
The potential policy impacts are vast. By identifying cities with disproportionate spillover effects, resource allocation can be more efficiently focused to buffer systemic shocks. Furthermore, integrating sector- and region-specific findings into urban planning may facilitate resilient infrastructure investment and adaptive labor policies that reduce vulnerability to future floods. The study advocates for multiscalar governance frameworks, recognizing that no city is an island and that effective flood risk management increasingly demands cross-jurisdictional collaboration.
Ultimately, Fang et al.’s landmark research forces a reckoning with flood risk as an economy-wide threat. Traditional approaches that segment flood damages by city boundaries risk overlooking how intertwined urban systems propagate shocks in waves that destabilize regional supply and labor markets. By mapping these cascading impacts with unprecedented resolution, the study equips decision-makers with the data and tools needed to confront urban flooding as a systemic challenge, one demanding integrated, forward-looking resilience strategies for cities across the globe.
In sum, this work is a pivotal contribution to urban flood risk science, bridging hydrological hazards and economic complexity. Its multiregional input-output modeling framework uncovers hidden pathways of loss and resilience, exposing vulnerabilities that transcend physical flood borders. As flood events grow more intense and frequent amid climate variability, adopting such advanced modeling approaches will be essential for safeguarding urban economies, preserving livelihoods, and navigating the uncertain terrain of 21st-century urban resilience planning.
Subject of Research: Economic cascading impacts of urban flooding and systemic risk propagation across multiple cities in China using a multiregional input-output modeling approach.
Article Title: Stress-testing the cascading economic impacts of urban flooding across 306 Chinese cities.
Article References:
Fang, D., Xu, F., Jin, X. et al. Stress-testing the cascading economic impacts of urban flooding across 306 Chinese cities. Nat Cities (2026). https://doi.org/10.1038/s44284-025-00372-1
Image Credits: AI Generated
DOI: https://doi.org/10.1038/s44284-025-00372-1
Tags: cascading effects of urban floodingeconomic losses from floodsflood frequency and intensity dataflood risk assessment methodologiesindirect economic effects of floodinginfrastructure damage from floodinginterconnectivity of urban economiesmultiregional input-output modelsupply chain disruptions due to floodingsystemic vulnerabilities in urban economiesurban flooding impactsurban resilience strategies
