China announced a 5 billion yuan (US$700 million) fund yesterday to help farmers recover from the country's worst snowstorms in decades as companies reported mounting losses.
Commercial banks also were ordered to lend more to farmers in southern and central China, where the snows have destroyed crops, ripped down phone and power lines and disrupted trains and trucking.
The central bank "will urgently create a 5 billion yuan farm support account, focusing on helping disaster lending by small institutions in disaster areas," it said on its Web site. It said commercial lenders were ordered to "create a seasonal lending plan as soon as possible" to help disaster areas.
The storms have compounded the impact of a coal shortage that has forced power plants to shut down and prompted steel and aluminum mills to cut production.
Shanghai-based Baoshan Iron & Steel Co (寶鋼), China's biggest steel maker, did not appear to be affected so far by the power shortages.
But more than 50 others in eastern China and elsewhere were cutting production because of power rationing, shortages of coal and other raw materials and blocked transport, mysteel.com said.
The Web site estimated the production lost was 500,000 tonnes for hot rolled steel, 800,000 tonnes for steel construction materials and 150,000 tonnes for medium-thick steel sheets.
Economists say storm effects so far are unlikely to have a lasting impact on China's overall economy. But they have cast a spotlight on the weaknesses of overloaded trains and other infrastructure that has failed to keep up with growth that has topped 10 percent for five straight years, hitting 11.2 percent last year.
Yesterday, state television showed Chinese President Hu Jintao (
Coal reserves nationwide stood at 21 million tonnes this month, less than half the normal amount, according to Xinhua news agency.
Economists blame the power shortages on a government freeze imposed on electricity prices in September in an effort to cool inflation. The freeze prompted utilities to curb losses by purchasing less coal, the price of which has risen to record highs in recent weeks.
Also yesterday, the country's biggest fixed-line phone company, China Telecom (
The storm has damaged a total of nearly 10,000 km of phone lines and knocked out 16,000 mobile phone base stations, news reports said, citing the Ministry of Information Industry.
Total losses to Chinese phone companies have reached 150 million yuan, the reports said.
In the hard-hit central province of Hunan, steelmaker Hunan Valin Steel Tube & Wire Co (
Scores of other steel mills, from southern China's Guangdong Province to Xinjiang in the northwest, have cut or stopped production, mysteel.com said.
Hunan Valin, in a notice to the Shenzhen Stock Exchange, said it expected power shortages to improve within days and that it was using the work stoppages to conduct maintenance.
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