China News, Counting The Cost Of The Clean-Up

What with an earthquake clean-up, energy crisis, rampant inflation and a leader with a Facebook page you could never say that life in China is boring.

You’ve got to wonder if the Chinese will look on 2008 with any kind of affection, Olympic Games or no Olympic Games.

The first half of 2008, China’s year in the world spotlight,certainly hasn’t been a cake walk and hasn’t been getting any better for them with an earthquake clean-up, emerging energy crisis and increasing inflationary pressures taking the jam out of many people’s donuts.

With the rescue attempts all but complete and rebuilding plans being set up China has just now started coming to terms with the Sichuan earthquake which had an estimated death toll of 80,000 people and an estimated cost of rebuilding after the earthquake hitting the US$60 billion dollar mark.

The location of the Sichuan earthquake which measured 7.9 on the Richter scale and has had a current death toll of 68’000 people and counting.

While economists are still arguing about the final cost of the earthquake the impact on energy creation and consumption was felt immediately.

The province is responsible for much of the country’s hydro power and 4% of the country’s coal production. Many of the provinces dams have had to been shut down or run at limited capacity while authorities check them for structural damages and government has asked China’s petroleum companies (iht.com/articles/ap/2008/05/25/business/AS-FIN-China-Fuel.php) to make up the shortfall in the meantime. A move that is no doubt sure to do wonders for the country’s air pollution problem.

The timing of an IMF loan (english.people.com.cn/90001/90776/90883/6420271.html) of US$441 million for energy efficiency work could not then have come at a better time for the country.

Inflation continues to dog China, with some predicting that the rate of inflation in China might top February’s high 8.7 percent.The key factors in this month’s rise are likely to be rising fuel costs and disaster area reconstruction costs.

Another city in China has been in the news recently for economic development reasons.

Tianjin, A city 120kms South East of Beijing, is set to have several technology and industry hubs (chinasourcingblog.org/2008/01/tianjins-binhai-new-area-to-be.html) built in the South-eastern part of the city.

The move is a little odd, when considering the governments’ previous pushes to build up economies in central and western China but could be an attempt to develop another logistics hub in the northern region to better manage the transfer of goods.

Outside of Beijing and Shanghai, cities in the Pearl River Delta have probably seen the largest inflationary pressures in the country with housing prices in cities like Shenzhen and Guangzhou especially shooting far beyond the reach of the average home buyer.

While there has been some movement in wages, workers are now arguing there hasn’t been enough of a move, a sentiment perhaps reflected in the lack of interest in positions at a job fair this year where only 4000 people turned up for an event where employers looking for 7000 people.

Guangdong employers’ employment problems (english.people.com.cn/90001/6419772.html) are likely to filter through to cost of production of goods in the region with some sourcing agents already reporting an increase in cost for some products.

CCP 2.0? Premier Wen Jia Bao getting down with the Internets

Western reporters, by and large been impressed by the way the Chinese Communist party have handled the earthquake comparing it very favorably to the way the Katrina disaster was handled.

However, that is nothing compared to Wen Jia Bao’s appearance on Facebook a couple of days ago.

It is not known if the appearance was the work of a forward-thinking government official or some Internet prankster, there is evidence pointing both ways. Critical messages of the CCP’s stance on liberation movements have been posted, and left untouched, on the ‘wall’ but there has been no moves by China to have it taken down and it has even appeared in some government owned papers.