
Earthquake will not damage China's economy


SHANGHAI, China - The earthquake that ripped through China's Sichuan province, killing more than 12,000 people, crumpling roads and factories and disrupting power and communication, will be only a transitory jolt for the booming economy, analysts say.
As companies assessed damage Tuesday from Monday's 7.9 magnvitude quake, it was clear that even in such a relatively remote region, China's economy increasingly affects companies worldwide, however.
Japan's Toyota Motor Corp. and other automakers announced they had temporarily suspended production at factories in Sichuan. Other companies, including Microsoft Corp. and Motorola Inc., reported minor damage to facilities.
"The Chinese economy, of course, will be hit first and the effect on the Japanese economy will come after that," said Japan's economy minister, Hiroko Ota. "Because we don't know the extent of the damage to the Chinese economy yet, it's hard to tell how much the Japanese economy will be affected."
Chinese authorities suspended trading in 66 companies based in the quake zone, helping to limit potential disruptions.
The Shanghai Composite Index dropped 1.8 per cent after falling as much as 3.3 per cent earlier. The Shenzhen Composite Index, of China's second, smaller bourse, slipped just 0.2 per cent.
By late Tuesday, authorities had not yet issued any official estimates of damage from the earthquake, which struck a heavily populated but hilly region north of Sichuan's provincial capital, Chengdu.
Access to many of the hardest-hit communities was blocked - state-run television reports showed roads impassable due to cracked asphalt and huge piles of rocks from landslides.
China's work safety agency ordered factories, coal mines, chemical plants and gas wells damaged by the quake to suspend operation for safety inspections.
"All types of production enterprises affected by the disaster, especially coal mines, chemical plants and gas wells, must immediately suspend production and evacuate staff," the State Work Safety Administration said in a statement on its Web site.
About 600 people died when two chemical plants collapsed in Shifang city just north of Chengdu, spilling more than 80 tonnes of toxic liquid ammonia, the official Xinhua news agency reported.
Although far inland, Sichuan is the site of major gas fields, coal mines and the industries that have grown up around them. Past policies promoting industrialization away from coastal areas mean the region has many factories.
China's main state-owned power company reported that the quake knocked out at least eight power plants and eight transformer substations.




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