Special report: Strong Earthquake
Jolts SW China
BEIJING, May 21 (Xinhua) -- As the heroic and
emotional relief efforts for the May-12 8.0-magnitude earthquake are gradually
drawing to an end, China is faced with a lasting and formidable mission:
reconstruction.
The earthquake, centered in Wenchuan County in the
southwestern Chinese Sichuan Province, has killed 40,075 people nationwide as of
6 p.m. Tuesday and authorities said the toll is feared to exceed 50,000. Some
247,645 others were injured.
By all standards, it will be the toughest
reconstruction task since 1976 when the northeastern coastal Chinese city of
Tangshan was leveled by a 7.8-magnitude quake, which claimed over 240,000 lives.
But in comparison with the reconstruction in the wake
of the Tangshan earthquake, the mission this time is blessed with a strong
economy, which has been growing annually at nearly 10 percent on average since
1978 when China began its reform-and-opening-up drive.
Economic toll and loss of private properties
Zhu Jing, in her 30s, could have never imagined she
would become what she is today -- a refugee in debt and with nothing valuable.
Following the May 12 earthquake, she was forced to
flee her hometown Dujiangyan, one of the hardest-hit city, to neighboring
Chengdu, the provincial capital of Sichuan.
In Dujiangyan, the devastating earthquake had turned
her home -- a flat which she bought on mortgage two years ago -- into a
dilapidated building unsuitable to live in, said Zhu, an employee of a local
power supply company.
"I still owe the bank nearly 100,000 yuan (about
14,300 U.S. dollars). I have spent almost the same sum to renovate my house and
buy home appliances," she said.
"Because of the disaster, my house has gone. My
hardworking over the last several years has gone down the drain," said the
heartbroken woman.
Zhu was not alone. In Sichuan some 2.9 million houses
were flattened and nearly 14 million others damaged, according to a rough
estimate.
Among them, only a small number was covered by house
insurance. As of Sunday, China insurance companies had received just 28,400
house-insurance claims, said the China Insurance Regulatory Commission.
These houses were just the tip of an iceberg of the
damaged or ruined properties in Sichuan.
Zhuang Jian, a senior economist of the Asian
Development Bank (ADB), told Xinhua that the disaster had caused huge loss to
property and wealth overnight, which is a challenging problem for
reconstruction.
Clearly, the quake had ruined the economy of dozens
of counties hit hard by the quake, Zhuang said.
A preliminary investigation showed that 14,207
industrial enterprises suffered 67 billion yuan of direct economic loss in the
calamity, the Ministry of Industry and Information Technology said Monday.
Wang Bin, Communist Party secretary of the epicenter
Wenchuan County, said the quake had flattened or greatly damaged nearly all
Wenchuan's buildings and ruined factories and infrastructure.
"Undoubtedly, Wenchuan's economy sustained a fatal
blow. The infrastructure built in the last decades was destroyed suddenly," Wang
said.
As the Chinese governments at all levels is still
focused on quake relief and disease prevention work, there is no official figure
of overall economic loss arising from the disaster.
Some economists had estimated that the Chinese
economy suffered a loss of over 500 billion yuan from the earthquake, more than
three times that caused by the snow and ice storm in February, which swept
across central China and disrupted transportation and the energy supply and
pushed up commodities prices.
Zhuang, of the ADB, maintained that the earthquake's
impact on the Chinese economy will be quite limited since Sichuan's GDP
accounted for no more than five percent of the country's total.
Reconstruction under market economy
When the Tangshan earthquake struck in 1976, the
Chinese people were living under a strictly-planned economy and didn't have many
private property.
Thirty-two years later, China has become a market
economy. But in the reconstruction after the Wenchuan quake, the government
still has to play a central role, said Zhuang.
The Chinese economy will be faced with a tough issue in helping those hundreds of thousands of people who lost their private property and wealth in the quake, said Wang.
Accordingly, governmental departments will have to make a thorough investigation and provide quake victims with different levels of assistance based on their losses, said the economist.
To help reconstruction, the Chinese government will need to formulate some special policies and provide a large amount of money and materials, Zhuang added.
He is right. Over the last two days, the government has already churned out some preferential policies to support the incoming reconstruction process in quake-ravaged regions.
On Monday, the People's Bank of China (PBOC, the central bank) and the China Banking Regulatory Commission (CBRC) issued a notice, requesting Chinese banks to provide financial support, including extension of loan maturities, for relief and reconstruction in quake-hit regions.
Banks should not push for loan repayment if debtors fall behind in payments, nor should they impose fines for defaults or add default notices to borrowers' credit records, said the notice.
On Zhu's case, PBOC's vice governor Su Ning had said his bank was considering "special solutions" for mortgage loans as many borrowers were either killed in the quake or had lost their homes. Further, an expected decline in borrowers' incomes following the quake would make the mortgage a heavy burden for them.
Also on Monday, the Chinese Ministry of Finance and the State Administration of Taxation jointly decided to give preferential taxation treatment to quake-stricken areas.
According to the circular, the country will give preferential tax treatment to the fight against earthquake and reconstruction after the quake in terms of corporate income tax, individual income tax, property tax, contract tax, resource tax, urban land use tax, vehicle and ship use tax, and import and export tax.
