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China tallies losses from earthquake

/ Source: The Associated Press

Cracked dams and buckled roads, collapsed buildings and toppled factories — China has begun to tally its losses from an earthquake this week that killed thousands and left thousands more missing, with estimates ranging to over $20 billion.

It remains unknown what kind of damage the quake has done to China’s rapidly expanding economy.

The death toll from the disaster rose to 22,069 late Friday, the official Xinhua News Agency said, as rescuers continued to pull survivors from the rubble and try to provide for tens of thousands left homeless by Monday’s 7.9 magnitude quake.

Central and local authorities promised $772 million for disaster relief, the central bank said, as millions more in public and corporate donations poured in.

Crumbled roads, toppled schools and homes and other damage could add up to losses of both insured and uninsured property exceeding $20 billion, according to AIR Worldwide, a catastrophe risk modeling firm.

Hydroelectric and chemical companies are among those with heavy infrastructure losses.

The Chinese government has yet to issue an estimate of damages, though state media reported the quake had destroyed homes and other infrastructure in parts of seven provinces.

The greatest impact was in Sichuan, where the quake was centered, and where entire communities were flattened.

Specific reports of damage and losses were emerging gradually. Although the quake zone is a relatively poor, hilly region, the area also has many factories.

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 14.3 percent Friday to 25.70 Hong Kong dollars, but trading in its Shanghai-listed shares was suspended pending a board meeting, Dongfang said.

Zinc and fertilizer producer Sichuan Hongda Co. said Friday its businesses were “severely hit.” It said 31 employees were dead.

Chemicals maker Sichuan Jinlu Group warned it expected more than 90 million yuan ($12.9 million) in direct economic losses, and saw its share price plunge by the daily 10 percent limit, to 5.85 yuan.

Power generator Sichuan Chuantou Energy Stock also saw its share price plunge by 10 percent, to 26.45 yuan, after it said one of its subsidiaries was severely damaged by the quake.

Trading in Sichuan Minjiang Hydropower, another small power company based near the quake’s epicenter, remained suspended pending a report on the quake’s impact.

Insurance companies so far have paid out nominal amounts but AIR Worldwide, a consultant and risk assessor for the industry, put insured losses at up to $1 billion. Uninsured losses are expected to be greater than 20 times that amount.

In Wenchuan county, location of the quake’s epicenter, China Life Insurance Co., the country’s biggest life insurer, had more than 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 impact of the disaster on China’s financial markets has been limited. China’s mainland bourses temporarily suspended trading in shares of companies based in the quake region, and brokers said that the securities regulator sought to discourage heavy disaster-related selling.

Still Chinese share prices edged lower Friday on the selling of regional power, cement and steel companies.

The benchmark Shanghai Composite Index slipped 0.4 percent to 3,624.23, while the Shenzhen Composite Index fell 0.8 percent to 1.124.29.

Investors were cashing in on midweek gains from speculation that such companies would benefit from rising demand due to post-quake reconstruction, analysts said.

“Some institutional investors are using this tragedy to speculate on reconstruction-related shares such as cement, electricity power and steel shares,” said Zhang Linchang, an analyst at Guotai Junan Securities.

To prevent price gouging and hoarding as it struggles to keep inflation in check, China’s economic planning agency imposed temporary price caps on basic goods and transport in quake-hit areas.

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.