China tallies losses, costs from major earthquake
AP , Shanghai: May 16 2008
Made Popular May 16 2008
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China :

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 over $20 billion.

With the death toll from the disaster forecast to rise as high as 50,000, China’s main focus Friday 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 ($772 million) for disaster relief, the central bank said, as millions more poured in public and corporate donations.

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 $20 billion.

Insurance companies had paid out 1.7 million yuan ($245,000) as of Thursday, the China Insurance Regulatory Commission said in a statement on its Web site.

AIR Worldwide put insured losses at up to $1 billion.

Although the death toll had risen to 19,509 by late Thursday, with some communities virtually flattened, 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 over 110,000 life insurance policies, according to a report by Fitch Ratings.

“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 total insurance payouts at 3 billion yuan ($430 million).

Specific reports of damage and losses were emerging gradually.

Zinc and fertilizer producer Sichuan Hongda Co. said Friday its businesses were “severely hit” by Monday’s earthquake, 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 11.3 percent Friday to 26.60 Hong Kong dollars 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 mainland bourses 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.

China’s economic planning agency, meanwhile, 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 Thursday that it would restrict prices for food, drinking water and transport in central Sichuan and Gansu provinces due to rising prices there.

Authorities were arranging special shipments of fuel, grain and edible oil to help prevent shortages.

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