Monday February 4, 08:22 AM
Limited economic impact from snow in China: state media
BEIJING (AFP) - The impact on China's economy of the worst snow in decades could be limited and may even spur a new round of investment, state media said Monday, quoting ranking economists.
Three weeks of snow across most of China has taken a toll on the economy but the impact will dissipate over the full year, Xinhua news agency reported, citing Fan Gang, director of China's National Institute of Economic Research.
The snow is likely to stimulate investment on items such as upgrading the national power grid or improving the transportation network for coal, Fan was quoted as saying.
"There is no doubt that such a big economy will encounter various difficulties each year, but the Chinese economy is maintaining stable growth momentum," said Fan.
The extra investment spending is a factor Chinese policy makers need to take into account as they prepare economic measures for this year, the mass-circulation China Daily quoted economists saying Monday.
"The economic situation has become complicated with the new factors cropping up," said Wu Jinglian, an analyst at the State Council Development Research Centre, the central government's think tank, according to the paper.
China's economy, the world's fourth-largest, grew by a blistering 11.4 percent in 2007, the highest level in 13 years.
Investment accounted for 4.3 of those 11.4 percentage points, more than the 2.7 percent accounted for by net exports, according to the National Bureau of Statistics.
The World Bank Monday also predicted limited impact on the economy, as it lowered the 2008 growth forecast for China from 10.8 percent to 9.6 percent, not because of the snow, but because of the global slowdown.
"Natural (Oslo: AKBM.OL - news) disasters normally call for economic activity to repair the damage," David Dollar, the head of the bank's China office, told a briefing in Beijing.
Most of the impact of the storms -- including rising food prices and a decline in industrial output over January and February -- will turn out to be temporary, World Bank economists said.
There "could be some pick-up (later in the year) as investment takes place to solve the bottlenecks," said Louis Kuijs, a senior economist with the bank.
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