Quake won’t have major impact on China’s economy: Experts

May 13th, 2008 - 7:40 pm ICT by admin  

Beijing, May 13 (Xinhua) The quake that shook the earth in southwest China and left a trail of devastation, killing more than 12,000 people, is not likely to have a major impact on the national economy, experts said Tuesday. The earthquake would only affect economic activity “in limited areas and some local industries in the short term,” Feng Fei, deputy director of the Research Department of the Industrial Economy of China’s State Council (cabinet), said in an interview with Xinhua.

The quake will have a much smaller impact on the economy than the winter storms that dragged down first-quarter economic growth and drove up prices, Feng said.

“Similar problems to those of the snow storms may occur but won’t be so serious,” he said.

Xie Xuecheng, an expert with Southwest Securities, said the quake could worsen China’s already high inflationary pressure. The consumer price index rose 8.5 percent year-on-year in April.

Since Sichuan is a major producer of grains and hogs, the grain supply might be affected, while transportation constraints involving hogs might drive up national pork prices, Xie predicted.

“Market price rises are unlikely as transportation to Sichuan was only partly affected,” said Galaxy Securities analyst Li Feng.

Li’s view was echoed by Feng, who told Xinhua the quake would not shake the general balance of supply and demand for major commodities and energy.

“Unlike what happened during the winter, not many large enterprises are located in the disaster-stricken areas,” said Feng.

Sichuan is a major source of natural gas, but most of its natural gas fields - like its hog farms - are in its southern half, while the quake epicentre was located in the province’s north.

The agriculture ministry said Tuesday that agricultural losses from the quake “should not be underestimated” and it urged local officials to ensure supply and strengthen market monitoring of grains and fresh food.

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