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China Spends $60 Million on Relief, Braces for More Snowstorms

Chinas government allocated $60
million in relief funds to ensure food supply, relocate families
and restore transportation, as the country braces for more
blizzards during next weeks Lunar New Year.

Food supplies will be carried toll-free until March 31,
while the government ensures at least 40,000 tons of thermal coal
can be moved daily to meet 10 days of demand by power plants,
officials said today. Troops will help to clear roads while
airlines and rail operators add services to free up millions of
stranded travelers.

“I can assure you that all government departments are doing
all we can to help passengers get home, in a country where 2.18
billion trips are expected to be made during the six-week travel
season around the Lunar New Year, the National Development and
Reform Commissions spokesman Zhu Hongren said today.

The heaviest snowfalls since 1954 brought down electricity
cables and disrupted coal shipments to power plants, causing
outages in half of China and forcing smelters, carmakers and
manufacturers to halt production. Blizzards crushed houses,
destroyed farmland and disrupted air, rail and road transport,
leaving millions of travelers stranded.

More snow and sleet will blanket southern and eastern China
in the next three days, the weather bureau said today,
compounding economic losses that have risen to 53.8 billion yuan
($7.5 billion). Snowstorms may reduce the economys 2008 growth
by 0.3 percentage point while adding 0.5 point to the highest
inflation rate in a decade, Credit Suisses chief Asia economist
Tao Dong said in a research note today.

The government set aside 431 million yuan in relief funds,
the civil affairs ministry said. The impact of the snowstorms on
the overall economy, which expanded 11.4 percent last year, will
be short-lived, officials said today.

“Such a disaster will be a temporary one and therefore it
effect on the Chinese economy will be a short one, Zhu said.

Stuck in Guangzhou

Up to 400,000 people are still stuck at the railway station
in southern Chinas Guangzhou city, as onward train services to
central and eastern China were blocked by blizzards. The city,
where Honda Motor Co. operates a car assembly, had up to 800,000
stranded travelers earlier this week in the countrys biggest
transport logjam.

Rail services resumed, with capacity to carry as many as
500,000 passengers a day, Ministry of Railways spokesman Wang
Yongping said today in an interview on state television.

Travelers driving north from Guangzhou are offered a 200
yuan gasoline subsidy to detour around the Jingzhu expressway
that connects the city and Zhuhai with Beijing, Xinhua News
Agency reported. About 12,000 vehicles and 37,000 people are
still stranded on the expressway because of snow and ice, it said.

The aviation regulator grounded 3,250 flights around the
country since Jan. 10 while 5,550 flights were delayed, said the
Civil Aviation Administration of Chinas transport director
Wang Ronghua.

Flights Grounded

Storms have incurred China Southern Airlines Co. more than
100 million yuan in losses, as the countrys largest carrier had
to add 128 flights to clear its backlog of passengers, the
Guangzhou-based company said today.

President Hu Jintao yesterday ordered the coal industry to
ensure supplies were delivered to power plants. Half a million
troops were mobilized in the countrys largest peace-time
deployment to clear ice, rebuild houses and restore power lines.

The death toll from the snowstorms since Jan. 10 rose to 60
as people were crushed in buildings and killed in road accidents,
the Ministry of Civil Affairs said today.

The payout by insurance companies may be up to 3.5 billion
yuan, after having paid 350 million yuan in claims as of Jan. 31,
Wu Dingfu, chairman of the China Insurance Regulatory Commission
said in a Webcast today.

Livestock Killed

“Vegetable prices have risen to a record, Xu Xihe, a
spokesman for the Ministry of Commerce, said on state television
yesterday. Snow also damaged 8.4 million hectares of produce in
17 provinces, according to government statistics.

About 15.8 million livestock, including 874,000 pigs and
14.4 million domestic fowls, have died in temperatures that
plummeted to the lowest in five decades, Chen Weisheng, an
official of the Ministry of Agriculture, said in a Webcast.

Storms blocked food shipments leading to price increases and
concern that inflation, already running at double the central
banks annual target, may accelerate.

“We may not have seen the worst yet, said Wang Tao, head
of Greater China economics and strategy at Bank of America Corp.
in Beijing. “The government has really mobilized a huge effort
to deal with the storms, but we will have to wait and see how
effective they are.

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