Peak Oil is You

Donate Bitcoins ;-) or Paypal :-)

Page added on January 30, 2008

Bookmark and Share

Inflation gloom in China snow chaos

Concern for China’s short-term inflation targets grew and the price of boxed lunches surged fivefold in the aftermath of heavy snowstorms – described as possibly the most severe in 50 years – that wrecked havoc across central and southern China.

Shares in some energy-related stocks meanwhile jumped as much as 23% as investors saw profits arising from chaos. The outlook for others was gloomier, with analysts saying some companies faced a hit to first-quarter revenue growth of up to 6 percentage points.

The storms may exacerbate China’s already accelerating inflation

in January and February, which in turn may force further tightening of macro policy and thus hurt growth, Jun Ma, chief economist for Greater China at Deutsche Bank, said in a note.

With the chaotic weather forecast by the Central Meteorological Station to continue for a week, Premier Wen Jiabao, reported by national media, said: “The most difficult stage has yet to pass.”

The storms hit electrical supplies, coal and food, and left thousands of businessmen and other travelers stranded at airports. Almost half the flights from Shanghai, the country’s busiest aviation hub, were delayed according to the Shanghai Airport Authority said.

Hundreds of thousands of workers – more than half a million alone in Guangzhou, provincial capital of Guangdong province, according to Xinhua – were benighted at train stations, many thwarted in their efforts to make long treks to join their families at home for the Lunar New Year, which this year falls on February 7.

Transport breakdowns and power shortages caused by damaged power lines and disrupted coal supplies were partially blamed for a share-price plunge in Shanghai and Shenzhen on Monday, even as some stocks gained. The Shanghai Composite Index dropped 342 points, or 7.19%, on Monday, recovering less than 1% on Tuesday amid gains elsewhere in Asia.

The snowstorms have so far caused about 22.1 billion yuan (US$3.07 billion) in direct economic losses, the Ministry of Civil Affairs said.

Asia Times

Leave a Reply

Your email address will not be published. Required fields are marked *