Using a mode-by-mode reconstruction, we evaluate the impacts of the various principal modes on the 1997 and 1998 observed rainfall anomaly. We find that the severe drought in northern China, and to a lesser degree the flood in southern China, in 1997 is likely a result of the influence of anomalous SST forcing during the growth phase of the El Niño. In addition, rainfall in southern China may be influenced by the decadal or long-term SST variability. The severe flood over the Yangtze River Valley in 1998 is associated with the biennial tendency of basin scale SST during the transition from El Niño to La Niña in 1997-98. Additionally, the observed prolonged drought over northern China and increasing flooding over the YRV since the 1950s may be associated with a long-term warming trend in the tropical Indian and western Pacific ocean. During 1997, the El Niño SST exacerbated the drought situation over northern China. In 1998, the drought appeared to get temporary relief from the La Niña anomalous SST forcing.