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Winter Freeze Sends Shockwaves Through China As Cash And More Run Short

Chinese street sweepers shovel snow into a cart after heavy snowfalls hit the eastern Chinese city of Nanjing, 31 January 2008. China has dispatched it's army to help millions of people stranded by snowstorms that have caused transport gridlock, crippled power supplies and hindered relief efforts. At least 460,000 troops from the People's Liberation Army and paramilitary forces fanned out across parts of China where dozens of people have died amid the worst storms in 50 years. Photo courtesy AFP.

China's central bank worries about cash supplies in bad weather
China's central bank Thursday urged local branches to ensure cash supplies as the harshest winter for 50 years stranded millions of travellers heading home ahead of next week's Lunar New Year. Severe bottlenecks or breakdown in the transport network in some areas brought "negative effects" to cash supplies around the Lunar holiday, a traditional peak of cash withdrawals, it said in a statement on its website. "The central bank required its branches to take immediate measures to ensure the cash supply before the Spring Festival," the People's Bank of China said. China's transport and power networks have been badly hit by the frigid weather since earlier this month, leaving millions of travellers marooned at railway stations and airports, some lacking daily necessities.

Freeze in China kills more than 15 million livestock: govt
Vicious winter weather has killed 15.8 million head of livestock, China said on Thursday amid fears that rising food prices could exacerbate already historically high inflation. The toll includes 14 million fowl and 870,000 pigs who froze to death or died due to disruptions in feed and water supplies, the government's official China News Service said. "The calamity has strained the ability to keep livestock warm and ensure food and water supplies," Chen Weisheng, vice director of the Agriculture Ministry's livestock department, was quoted as saying. China's inflation was already at an 11-year high, due largely to surging food prices, even before a bout of severe winter weather began on January 10. The weather has caused massive gridlock to the country's transport system, hampering distribution of food. State media said resulting shortfalls have caused vegetable prices to soar in many areas. Beijing has made fighting inflation its top economic priority this year and earlier this month implemented strict price controls on key commodities. China had an estimated 5.4 billion fowl and nearly 500 million live pigs in 2006, according to Ministry of Agriculture figures.
by Staff Writers
Changsha, China (AFP) Jan 31, 2008
Authorities in China on Thursday warned of more travel misery to come as millions of people struggled to get home for the country's most important holiday amid savage winter weather.

Across central, southern and eastern China, millions of travellers have been stranded or delayed by the worst snow storms seen here in half a century which have killed 64 people, cut electric power and created havoc on roads and rails.

On Thursday Chinese President Hu Jintao descended into a mine in northern Hebei province and urged miners to work overtime to supply areas suffering from electricity blackouts with more coal.

"While giving priority to safety, we have to dig up and supply more coal in order to relieve supply shortages, protect normal economic activity and allow the people a happy Lunar New Year festival," Hu urged the miners.

"As you all will not be able to have any days off, I wish you early New Year's wishes for good health, smooth work and prosperous families."

At least 30 million people have been affected by rolling power blackouts, with the weather strangling the distribution of coal, source of three-quarters of China's energy, the government has said.

With trucks unable to deliver basic goods to some areas, the army and air force have been recruited to kickstart relief efforts while the government in Beijing has called for calm, with still more harsh weather forecast.

The government has also taken the rare step of asking millions of migrant workers to forego their annual trip home for next week's Lunar New Year festival -- often the only bright spot in a life of hard toil and low pay.

"For the sake of their safety, and relieving the stress on transport, I advise migrant workers to stay in the cities where they work," Zheng Guoguang, chief of the China Meteorological Administration, told the China Daily.

"In normal weather conditions, it would take at least one week for full restoration of power supplies. Against the current backdrop, it will take far longer for electricity supplies and road and railway traffic to return to normal."

Although air, rail, and road traffic in some areas has slowly resumed, the transport system is effectively paralysed in others.

In Changsha, capital of hard-hit Hunan province, crowds mobbed airport check-in counters on Thursday.

About 100 passengers blocked access to the security screening area in frustration at the transport snarls, said Frankie Fu, a college student who has waited for a week to return to his home in Guizhou province.

"We have to protest -- otherwise we won't get home in time for the festival because weather forecasters say there will be more snow," he told AFP.

Airport officials told AFP that up to 10,000 passengers in Changsha had been affected by flight cancellations and delays in recent days.

Elsewhere, long stretches of major highways remained impassable, with state television broadcasting images of tens of thousands of cars and cargo trucks in bumper-to-bumper standstills.

In the southern city of Guangzhou, an estimated 800,000 people reportedly remained stranded amid continued chaos on road and rail networks leading north.

Officials were quoted by state media as saying the snarls there, where millions of migrant workers live and work, would persist for at least another three to five days.

In a rare move for a Chinese leader, Premier Wen Jiabao waded into crowds of marooned passengers at Guangzhou's main train station on Wednesday to declare the government was doing all it could.

But Zhang Yongfang, the 32-year-old manager of a Guangzhou computer shop, joined many in criticising the government for failing to anticipate the scale of the mess.

"We have to be able to deal with this properly to demonstrate that we can also deal with big events like the Olympics this year," said Zhang, who is trying to return home to adjacent Hunan province.

The government has ordered troops to join in relief efforts following mounting reports of water shortages and spiking food prices, with the country apparently on something approaching a war-footing.

Four air force aircraft flew quilts and winter coats to the south of the country, while more than 100 planes and helicopters were on standby, state news agency Xinhua said, quoting unnamed military sources.

"Whenever there is a disaster, the military is obliged to take part in the relief work," Senior Colonel Tian Yixiang of The People's Liberation Army (PLA) was quoted as saying by Xinhua.

"When manpower is in need, we send our men. When goods are in need, we offer our goods."

Nearly 150,000 homes had collapsed and another 600,000 had been damaged amid total direct economic losses of 4.5 billion dollars so far, state media said. Reports say more than 100 million people in the nation of 1.3 billion have been affected by the weather.

earlier related report
Big China freeze hits transport stokes price rises analysts
China's big freeze has created transport bottlenecks and caused the price of food and other basic necessities to rise at the worst possible time for Beijing's policy makers, analysts said Thursday.

The price spike caused by the bad weather, which has affected at least 105 million people and killed 64, comes as controlling inflation is now a priority for the first time in over a decade amid fears it could cause unrest.

"Pressure on food prices has risen again in the last few weeks when China was hit by storms of historic proportions," Grace Ng, a JPMorgan Chase Bank analyst, said in a research note.

"The fact that this is the busiest travel season of the year made things worse ... Vegetables and fruit, which must be shipped from southern to northern China, have led the price increases."

Rising prices, especially of essential items, were already an issue before the worst snowstorms in five decades hit China, whose booming economy grew 11.4 percent last year, stoking inflation.

The cold weather could affect the normally large crop yields in China's usually temperate south over the coming months, possibly sending food prices higher, said Deutsche Bank economist Ma Jun.

"As temperature is falling below eight degrees centigrade in many locations, it would also be bad for crops for the year," he said, adding food prices were set to rise in January and February, worsening already accelerating inflation.

Chen Xiwen, a senior policy maker, said Thursday that January economic data indicated that inflation remained at 6.5 percent, near 11-year highs.

Others forecast that inflation could surge to still higher levels -- up to 6.8 percent in January and 7.0 percent the following month, according to Li Huiyong, an analyst at securities firm Shenyin Wanguo.

The fierce winter storm, which has ground China's strained transport network to a near halt just as millions of travellers strive to get home ahead of the Chinese Lunar New Year holiday, has already hit energy and food supplies.

A recent round of price curbs had compounded the effects of the admittedly unforeseen storm, analysts said.

China has capped key food, electricity and gasoline prices for fear of public anger over inflation, as has occurred in the past, with soaring prices cited as a key trigger of the Tiananmen Square protests in 1989.

"One result of such controls is the reduced supply of electricity and transportation services," said Hong Liang, an economist at Goldman Sachs.

Power producers had also stockpiled about half the normal level of coal because the price controls had curbed supply, exacerbating what she described as "a blooming crisis in the making."

"The damaging effect from this snowstorm will bring a clear negative impact to the economy and industrial profitability along with inflation in the first quarter," said Feng Yuming, an economist at Orient Securities in Shanghai.

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Migrant workers sleeping rough in China's big freeze
Guangzhou, China (AFP) Jan 30, 2008
With little cash and nowhere to go, thousands of Chinese migrant workers struggling to get home are sleeping rough as China's transport network buckles under the big freeze.

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