China Battles Rising Prices, Snowstorms

From the Christian Science Monitor:

The snowstorms currently sweeping China have wreaked havoc with millions of people’s New Year travel plans and caused $3 billion worth of losses, including thousands of acres of winter crops.

But the harsh weather is revealing an even deeper problem for Beijing: the difficulty of trying to manage a mixed economy, which is about 30 percent state-owned and 70 percent in private hands.

“The Chinese economy is not a real market economy, nor a real command economy, so government controls are not very effective,” says Xu Guangjian, an economist at People’s University in Beijing.

Food and power shortages affecting tens of millions of people, and tens of thousands of enterprises, have drawn attention to just how difficult a task the Chinese government faces, even when the sun is shining.

The weather and the timing have compounded underlying economic problems, says Stephen Green, senior economist with Standard Chartered Bank in Shanghai.

See also China relaxes loan curbs amid blizzards from Financial Times and “Snow Havoc In China Causes $7.5 Billion Loss” from Xinhua, which says:

The heavy snow that hit China’s central and southern regions over the past three weeks has caused economic loss of about 53.9 billion yuan ($7.5 billion), the Ministry of Civil Affairs said Friday.

The worst snow in five decades has so far killed 60 and forced more than one million people to relocate. More than 200,000 houses were destroyed and another 800,000 were damaged in heavy snow, said Zou Ming, deputy director of the ministry’s disaster-relief department.

Hunan, Hubei, Guizhou, Jiangxi and Anhui provinces and the Guangxi Zhuang Autonomous Region were most severely hit. The central government has allocated 331 million yuan ($45.97 million) to fund local disaster relief work, Zou said.

February 1, 2008 12:03 PM
Posted By:
Categories: Economy