China suffers from frequent summer floods and droughts, but seasonal forecast skill of corresponding summer rainfall remains a key challenge. In this study, we demonstrate useful levels of prediction skill over the Yangtze river valley for summer rainfall and river flows using a new high resolution forecast system. Further analysis of the sources of predictability suggests that the predictability of Yangtze river valley summer rainfall corresponds to skillful prediction of rainfall in the deep tropics and around the Maritime Continent. The associated dynamical signals favor increased poleward water vapor transport from South China and hence Yangtze river valley summer rainfall and river flow. The predictability and useful level of skill demonstrated by this study imply huge potential for flooding and drought related disaster mitigation and economic benefits for the region based on early warning of extreme climate events.