Stranded Travelers Mob China's Trains

Worst Storm In 50 Years Bring Economic Losses Estimated At $3 Billion

(AP)  Two weeks of near continuous snow and ice storms have paralyzed much of central and eastern China, stopping traffic, wrecking crops and killing dozens in road accidents and collapsed buildings.

Chen said the overall effect on agriculture depended on how long the storms lasted and whether they moved into northern China, which produces most of the country's wheat and oil crops.

"If it heads northward, then the impact on the whole year's grain production will be noticeable," Chen said.

Cabinet and party officials have ordered plans into place to deal with an emergency, he said.

Chen gave no figures on economic losses, although the Civil Affairs Ministry put the figure at $3 billion; since the storms began Jan. 10. Along with crops, fish and poultry farms have also been hard hit, and much industrial production is at a standstill.

Transport delays have already driven up vegetable prices nationwide, with those in the hardest hit areas more than doubling. Wholesalers in Beijing were quoted as saying only about 20 percent of the usual supplies of fresh vegetables were reaching the city.

Chinese cuisine places an emphasis on fresh produce, much of which is now grown in plastic-sheeted greenhouses that have buckled and collapsed under the snow.

In the central city of Zhengzhou, tomatoes had doubled in price since before the storms hit, local media reported. Lamb and other meat prices soared in the southern transport and manufacturing hub of Guangzhou, and in nearby Shenzhen, the cost of 47 types of vegetables had risen by an average of 36 percent, the reports said.

Fuel prices have also increased, with anthracite coal for household heating rising by 75 percent to $208; per ton from before the snow.

Authorities have ordered a priority given to coal and food shipments, with all tolls, fees and restrictions waived. On the tropical island province of Hainan, transport bottlenecks maxed out refrigeration capacity, with large amounts of fruit and vegetables at risk of simply being left to rot.

Food shortages complicate Beijing's struggle to lower inflation by increasing supplies, a task the government has made a top economic and political priority.

Double-digit increases in food prices for much of last year drove December's inflation rate to 6.5 percent.

In other remarks, Chen said January's inflation rate would likely stay around the December mark, despite the weather-related disruptions.

Inflation is unlikely to "fluctuate much above or below 6.5 percent," Chen said, stressing that was his personal view rather than an official prediction.

The government has already responded with a variety of measures, from freezing prices for a slew of goods, to boosting farm subsidies and curbing industrial use of corn.

Goldman Sachs economist Hong Liang said short-term price rises and production losses could be offset by a rise in grain production because of wetter conditions.

However, Liang said the crisis exposed severe structural problems and vulnerabilities, revealing the need for more infrastructure development and better economic management.

"A small shock to the supply side can cause massive bottlenecks and inflation pressures," Liang said in a report to clients.

The weather crisis overshadowed essentially good news for China's farmers in 2007, a bumper year when grain production rose 0.7 percent over the previous year to 501.5 million tons.

Farmers' per capita annual incomes hit a record high of $575; up more than 10 percent from the year before, although Chen warned they also suffered from rising consumer prices.

"The agriculture and rural economy has maintained good momentum," Chen said.

[runningralph]

China will land on it''s feet. When the going gets tough, the tough get going. Compare the Chinese reaction to the Katrina reaction where people are still trying to sue the taxpayers.

[heyitsme_76]

I heard Wal-Mart is asking all its US-based employees to donate $10 from their paycheck to help the Chinese get through this trouble.. :)

[ianlou]

If China needs food, lets sell it to them with a 1000% mark-up. I hear they can afford it.

[rudy654-2009]

Posted by mbcsmith at 10:27 AM

Yeah, you uh...need to like educated yourself on global warming. I know. Must be hard to crack book and actually study something and know what it''s all about (god forbid), but uh...the mere heating of the oceans would indeed cause the excess in snow storms that we are now experiencing throughout. But, what do scientists know? I mean, didn''t they say the world was round, and look where that got Galileo. Yeah, you are way too smart for a bunchy geeky scientist. Oh great and wise mbcsmith!

[beehive21-2009]

Sounds like Utah,Park City is 125 % of snow,for date in time,blue skies today more snow tonight,we love the snow,let it snow,snow.Skiing is great.

[mbcsmith]

Yep, that global warming thing is sure heating up, except for the 75% of the earth under snow. Record cold waves. Now, how does that global warming thing work again?

[olebd]

China needs our help! Let''s all go to Wal-Mart! Be sure to fill your carts.