Will the Quake Shake the Economy?

Related entries: Economy, General, News

While China stood in silence to mourn the human impact of the earthquake (and even netizens took time off), and the physical devastation locally, the wider economic impact also needs to be addressed as part of the recovery plan. Euronews reports:

    “US investment banks Merrill Lynch and Goldman Sachs say the quake should not have as much of an impact as the huge snow and ice storms that hit much of the country during the winter.

    Sichuan is not a major economic centre. It accounts for 4.3% of China’s GDP and 0.6% of the country’s exports. The region’s economy grew by 14.5% in the first quarter compared with the same period last year – that’s faster than the national average – and direct economic losses there are forecast to be around 6.5 billion euros.

    Transport, power, water and gas supplies have been disrupted and as up to 20 million people from Sichuan work as migrant labourers elsewhere in China there could be an impact on the overall economy as some of them return home to help with reconstruction there.

    However, that reconstruction work is likely to stimulate investment and compensate for damage done to the economy from closed factories and lost jobs.

    In terms of industrial production, the Beijing government says more than 14,000 businesses in the Sichuan area have been damaged and because of the heavy casualties it is predicted that consumption in the province will fall by as much as a third.”

While the national picture may not be too bleak, there will be challenges – not least in agriculture. China Economics Blog notes:

    “Unfortunately the earthquake and its corresponding devastation are almost certainly going to complicate matters horribly for the PBoC in its attempt to manage monetary policy and fight inflation.”

To read more from them see here.

See news sources:

    China counts economic cost of Sichuan quake
    Euronews.net – Lyon,France
    It accounts for 4.3% of China’s GDP and 0.6% of the country’s exports. The region’s economy grew by 14.5% in the first quarter compared with the same period …

One Response to “Will the Quake Shake the Economy?”

  1. johnnywill Says:

    Read more about Chinese economy http://www.hellochina.com/invite/by/vili/business_en

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