Cracked dams and buckled roads, collapsed buildings and toppled factories — China has begun tallying losses from the calamitous earthquake that struck earlier this week, with estimates ranging to more than US$20 billion.
With the death toll from the disaster forecast to rise as high as 50,000, China’s main focus yesterday remained on rescue and relief for survivors of the 7.9 magnitude quake that hit Sichuan Province on Monday.
Central and local authorities have allocated 5.4 billion yuan (US$772 million) for disaster relief, the central bank said, as millions more poured in public and corporate donations.
PHOTO: AFP
Given the extended destruction of roads, schools, homes, businesses and other infrastructure, AIR Worldwide, a catastrophe risk modeling firm, said it estimated that losses to both insured and uninsured property would likely exceed US$20 billion.
Insurance companies had paid out 1.7 million yuan as of Thursday, the China Insurance Regulatory Commission said in a statement on its Web site.
AIR Worldwide put insured losses at up to US$1 billion.
The quake struck a relatively poor area where few families would hold life or household insurance. Still, in Wenchuan County, location of the quake’s epicenter, China Life Insurance Co, the country’s biggest life insurer, had more than 110,000 life insurance policies, a report by Fitch Ratings said.
“In addition to commercial property and business interruption claims, payouts on life insurance policies are also expected to be sizable,” Fitch said.
The Shanghai-based newspaper Oriental Morning Post cited one estimate putting maximum potential insurance payouts at 3 billion yuan.
Specific reports of damage and losses were emerging gradually.
Zinc and fertilizer producer Sichuan Hongda Co said yesterday its businesses were “severely hit” by Monday’s quake, with 31 employees dead.
Dongfang Electric Corp, a major manufacturer of power equipment, reported serious damage and casualties at a steam turbine factory, although other facilities were little affected.
The company’s Hong Kong traded shares fell 14.3 percent yesterday to HK$25.70 (US$3.29) after trading in its shares resumed for the first time since Tuesday. Trading in its Shanghai-listed shares was suspended pending a board meeting, Dongfang said.
The impact of the disaster on share prices overall has been limited. China’s bourses outside of Hong Kong temporarily suspended trading in shares of companies based in the quake zone, and traders in Shanghai said the country’s securities regulator had sought to discourage heavy selling related to the disaster through informal means.
Chinese share prices edged lower yesterday on the selling of regional power, cement and steel companies.
Investors were cashing in on midweek gains from speculation that such companies would benefit from rising demand due to post-quake reconstruction.
“Some institutional investors are using this tragedy to speculate on reconstruction-related shares such as cement, electricity power and steel shares,” said Zhang Linchang, an analyst at Guotai Junan Securities.
The benchmark Shanghai Composite Index slipped 0.4 percent to 3,624.23. The Shenzhen Composite Index fell 0.8 percent to 1.124.29.
China’s economic planning agency, already struggling to keep inflation in check, has imposed temporary price caps on basic goods and transport in quake-hit areas, warning that price gouging would be punished.
The National Development and Reform Commission said on Thursday that it would restrict prices for food, drinking water and transport in Sichuan and Gansu Provinces due to rising prices there.
Authorities were arranging special shipments of fuel, grain and edible oil to help prevent shortages.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft