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Quake's economic impact 'limited'

13 May, 6:25 PM

The earthquake that devastated parts of central China's Sichuan province will likely have a limited impact on the country's booming economy, analysts have said, though repercussions were seen across the region.

A Chinese disaster relief official says the death toll has risen to nearly 12,000.

The quake destroyed schools, factories and other buildings in the hilly but industrialised region of small cities and towns. Thousands were buried in rubble and landslides, state media reported.

China's work safety agency ordered factories, coal mines, chemical plants and gas wells damaged by the quake to suspend operation for safety inspections. "All types of production enterprises affected by the disaster, especially coal mines, chemical plants and gas wells, must immediately suspend production and evacuate staff," the State Work Safety Administration said in a statement on its website.

Sichuan province, where the 7.9-magnitude quake struck on Monday afternoon, is the site of major gas fields, coal mines and the industries that have grown up around them. China's main state-owned power company said earlier that the quake knocked out at least eight power plants and eight transformer substations.

To minimise disruptions to financial markets, China's two stock exchanges suspended trading Tuesday in 66 companies based in the quake-struck region. But share prices fell anyway, with the benchmark Shanghai Composite Index slipping 1.8% to 3,560.24.

China's economic planning agency ordered industries to ensure supplies of power, coal and medicine to areas hit by the quake. Banks were told to make sure adequate cash was available, while the Commerce Ministry called for companies to provide emergency shipments of instant noodles, mobile phones and other needed equipment.

Two chemical plants collapsed in Shifang city just north of Sichuan's capital, Chengdu, the official Xinhua News Agency reported, burying hundreds of people and spilling more than 80 tons of toxic liquid ammonia. About 600 people were killed, although Xinhua did not say whether they died in the quake or from the chemical spill.

Sichuan is one of China's most heavily populated provinces, and although it is far inland, past policies promoting industrialisation away from coastal areas mean the region does have many factories.

In Tokyo trading, shares in bulldozer and heavy equipment makers like Komatsu rose on expectations of higher demand due to the cleanup and rebuilding from the quake.



Copyright 2007 The Press Association. All right reserved. This material may not be published, broadcast, rewritten, or redistributed.

 
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