A massive earthquake hammered Sichuan Province on May 12, causing heavy casualty tolls and a severe loss and damage to China's economy. The quake relief work is presently under way. According to analysts, while the devastating quake has introduced some economic uncertainties; it is not expected to change the fundamental direction of China's economy. China's economy will continue to develop in a "better and faster" way.
Ba Shusong, expert at State Council Development and Research Center, said that the quake would not tweak the trend of economic growth. Currently, the fundamental direction of China's economy is to press ahead in a "better and faster" way. With the implementation of related macro-control policies, the 2008 economic blueprint brought up in the government work report will materialize in time.
However, the State Council said in a statement that inflation is still a major problem – although it is now under effective control – and the risk that structural inflation could evolve into one that is evident remains. Moreover, in economic operations there still exist overheating concerns. And the government will continue to contain overly rapid price hikes and strengthen price administration.
The great loss and damage to people's lives and properties, induced by the destructive quake, also delivered a harsh blow to infrastructure, enterprises and businesses in the quake-hit areas. Meanwhile, local industrial and agricultural production has been suspended; and the local economy adversely affected. As of May 22, Central enterprises, namely enterprises under the direct management of the central government, had borne an estimated loss of roughly over 30 billion yuan. By a preliminary estimate, and in Sichuan alone, 14,207 industrial enterprises had been hit, causing a direct economic loss of 67 billion yuan; and businesses and service industries have faced a direct loss of 20 billion yuan.
Even so, Dr. Liu Xin, a professor at the Public Relations Institute of Renmin University, pointed out that the destructive effects caused by the deadly quake are regional; in effect, its direct impact on national economic growth as a whole will be limited.
The central government has already allocated 70 billion yuan in reconstruction funds, in addition to 25 billion yuan for rescue and relief operations, to the disaster-stricken areas. Contributions from various social sources have amounted to 16 billion yuan. Experts believe that a large sum of capital input is yet to come; and it will jack up rebuilding funds in quake-ravaged areas to 100 billion yuan. All this will function together to provide solid financial support for the reconstruction program; and help the disaster-hit areas restore production and develop the economy.
The People's Bank of China has also adopted differentiated financial policies in disaster-hit areas to cushion the impact induced by the powerful quake. And other related economic policies are expected to be formulated to ease the financial strains on disaster-stricken people. In the meantime, a large demand market will be forged in a flurry of the post-quake reconstruction projects, which will boost the development of the related industries and push forward the economic growth.
What we have to do, at present, is to adhere to the "outlook of scientific development" and look at the overall economic situation. While fully engaged in arduous combat against calamities and the relief work in disaster-hit areas, we will also be firmly bent on economic development so as to maintain steady economic growth.
By People's Daily Online
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