Wednesday, 31 December 2008
Quake Recovery Central to Chinese Stimulus Plan
In a recovery that will take years, the prosperity of the whole country is at stake. Quake reconstruction is a central plank of the government’s stimulus plan for the ailing Chinese economy. It is set to take one-quarter of a promised spending increase of 4 trillion yuan, or $586 billion, and to create millions of sorely needed jobs.
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Quake Recovery Central to Chinese Stimulus Plan
By Simon Rabinovitch
Reuters
29 December 2008
ANXIAN, China: In 80 seconds of shaking, the devastating Chinese earthquake earlier this year cut a swath of death and destruction through remote hilly towns.
In a recovery that will take years, the prosperity of the whole country is at stake. Quake reconstruction is a central plank of the government’s stimulus plan for the ailing Chinese economy. It is set to take one-quarter of a promised spending increase of 4 trillion yuan, or $586 billion, and to create millions of sorely needed jobs.
Already, the disaster zone has been transformed into a vast, manic construction site, with people made homeless hammering away to reverse their situations and entrepreneurs from far-flung corners of the country attracted by the whiff of profit in calamity.
“I’ve been doing this job for about 20 years and I’ve never seen things so busy,” said Zhao Renjun, handling steel girders at a construction site in Anxian County, part of the huge area rocked by the May 12 earthquake, which killed more than 80,000 people in the southwest part of the country.
“I haven’t had time to fix my own house,” he said. “I’ve been so busy working for others.”
A partial list of needs includes 4.5 million homes, 51,000 kilometers, or 31,700 miles, of roads and 5,500 kilometers of railways - enough to occupy at least some of the 20 million people who could lose jobs in once-humming export factories hit by the global slowdown.
The feverish activity inspires confidence about the financial muscle of the state and the vigour of the economy that it is trying to nurse back to health, but it also carries warning signs of the corruption, waste and unforeseen complications that are already dogging Chinese economic plans.
“Because everyone is building, prices for materials have shot up,” said Liu Siyin, 34, taking a break from hauling buckets of cement at his quake-damaged home.
“We can’t buy everything we need now and we might have to stop building for a while,” he said. “We really wish the government could control prices.”
Liu had just started laying bricks for the second-floor wall of his house up a treacherous mountain road. Only half joking, he said fast-inflating costs for materials would neutralize his interest-free loan of 50,000 yuan from the government for rebuilding. Bricks and cement from local vendors have tripled in price in just a few months.
Some local authorities, including the city government in Mianyang, have vowed to crack down on price gouging. However, a degree of price increases is exactly what the government wants. As with the stimulus package for the wider economy, Beijing is providing a huge pot of cash to kick off quake reconstruction, but the government expects to lure private businesses into the fold to have the investment momentum spread more widely.
A profit-chasing zeal has already been unleashed.
Piles of bricks, bundles of steel girders, wood boards and small concrete mixers - all for sale - line the narrow highways in the disaster zone, many in front of makeshift shops set up by entrepreneurs from Chongqing, a huge city 350 kilometers to the east.
Some have come from much further afield. Tang Qinghua, a young, energetic man with close-cropped hair, said his last job had been selling apartments in Shenzhen, the one-time boomtown across from Hong Kong where property prices have dropped nearly 20 percent over the past year.
He and two friends now ply rutted back roads in a small van to drum up customers for their selection of tiles - green, white and clay, glazed and unglazed, interior and exterior.
“People have no choice here. They have to rebuild. And we’re making a contribution, helping them out,” Tang said.
Glimpses of a darker side to the reconstruction effort have come through in official reports.
Any country that throws so much cash at disaster recovery, when urgency overwhelms usual budgetary checks and balances, must contend with mismanagement and outright theft.
China, which has long struggled to rein in corruption, is no exception. Small, isolated cases have been publicized so far.
A national audit found that a half-dozen villages had improperly spent subsidies meant for quake victims or demanded illegal reconstruction fees. An investigation in Chongqing concluded that a hospital had sold donated medicine for profit.
A little more than one month after the quake, the National Bureau of Corruption Prevention said it had already received more than 1,000 complaints from the public and punished 43 officials.
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