Quake costs China 73 bln USD: says official think tank

Source: Xinhua | 06-18-2008 18:09

BEIJING, June 18 (Xinhua) -- Direct economic losses from last month's Sichuan Province earthquake could reach 400 to 500 billion yuan (58 to 73 billion U.S. dollars), according to a major state think tank.

The overall impact on the national economy, however, was likely to be minor, said the State Information Center, a think tank under the National Development and Reform Commission, the country's top planning agency.

The center said in a report published Wednesday that the quake might reduce China's economic growth by just 0.1 percentage point. And the losses well might be offset by the huge costs of rebuilding, which could raise fixed asset investment growth by 1.1percentage points and help the economy grow 0.4 percentage points faster.

Most of the damage wasn't covered by insurance, as awareness of such products is low in remote areas, analysts said. Indeed, as of Sunday, insurers had paid out only 316 million yuan for 249,000 quake-related claims, according to the China Insurance Regulatory Commission.

Of that amount, 179 million yuan was for life claims and 137 million yuan for property claims, the industry regulator noted.

It cited preliminary statistics showing that 16,500 life insurance policy holders were killed in the magnitude 8.0 quake on May 12, with another 2,474 injured. Further, 149,000 insured houses collapsed in the quake.

The death toll was 69,172 as of Tuesday noon, said the State Council Information Office. Another 17,420 people still missing.

The quake's aftermath would increase upward cost pressures, as it would cut supply of many items while raising demand, at least in the short and medium term, according to the report.

Consumer prices rose 7.7 percent in May, marking the first significant drop in the rate since last year. But the figure was still far higher than the government target of 4.8 percent for all of 2008.

Editor:Zhang Ning