On 12 May at 2.28 p.m. local time, I was on a direct train to Guangzhou, when a catastrophic earthquake, later upgraded to 8 on the Richter Scale, devastated Sichuan and some areas in neighboring provinces, leaving millions homeless and over 80,000 dead or unaccounted for.
According to the Information Office of the State Council on 21 May, the death toll had reached 41,353 (later revised to 55,239) with 274,683 injured and 32,666 still missing. So far a total of 6,452 survivors had been unearthed from the rubbles with 396,811 rescued or evacuated.
When CNBC Europe emailed me about the economic impact of this disaster, I gave the following take:
(a) The earthquake is more severe than the last big one at Tangshan on 28 July, 1976. It has now affected an area of some 100,000 sq km. One of the 'rice bags' of China, Sichuan accounts for 9.2% of China's grain output and 9.4% of China's rice output. But most of the affected areas are hilly rural villages representing only a small percentage of Sichuan’s agricultural production. Moreover, China has built up a huge rice and grain reserve which should moderate any upward pressure on food prices. In any case, such impact is likely to be temporary as China is a net food importer.
(b) Albeit one of China’s largest provinces, Sichuan's contribution to China's GDP is only about 3.5% , accounting for 1% of China's export. The Chinese authorities have so far estimated the direct physical loss at about US$10 billion. Analysts have figured that the overall economic impact is likely to be in the range of 0.2 -0.7% of China’s GDP.
(c) As part of the leadership's full-throttled response, there will be vigorous infrastructural investments in reconstruction. These will have a significant positive GDP contribution, though at the expense of sustaining higher steel and concrete prices.
(d) Overall inflation in China is expected to moderate in the second half of 2008 as a result of the cooling of the world economy. In keeping with a tightening policy, Premier Wen has since ordered a cut of 5% in all government budgets, particularly in areas of non-essential expenditure, in order to pay for the reconstruction.
(e) Amidst slower global economic growth and rising commodity prices in 2008, China's overall GDP growth is expected to decelerate to 9 or even 8%. Nevertheless, this would still be the envy of many countries.
The way this earthquake has shaken China and the rest of the world is not so much the scale of its economic impact or loss of lives and property. It is how the Chinese leadership and the Chinese people have remarkably risen to this colossal adversity.
There was instantaneous 24-hour TV coverage across the country with massive press reports and the international media given unprecedented free access. Premier Wen flew to the scene within four hours and went straight near the epicenter. Over 100,000 soldiers of the PLA were mobilized to save lives and provide emergency relief amidst the rubbles. Psychological counselling teams were working around the clock on deprived children and relatives. The entire nation of volunteers, many leaving their jobs, hurried to give a hand. Almost immediately, as many as 57 civic groups were mobilized online and offline with a coordination office set up in Chengdu. There were long queues in many cities to donate blood. Voluntary cash and material donations came pouring in across the country and from the Chinese Diaspora, now reaching $2 billon and counting. Similar support along with rescue teams has been arriving from many governments around the world, including the US, EU, Russia, Japan, the Middle East, South America, and Africa.
For the first time for a natural disaster, the nation went into an official three-day national mourning from 19 – 21 May, with all national flags flown at half-mast. All the flags at the United Nations were also flown half-mast in support.There was a three-minute silence on the first day to pay respect to the dead. As a fifth of mankind of 1.3 billion people from all walks of life stood in grim silence, few managed to suppress their tears. Fresh in their minds were vivid scenes of courage and compassion, some not widely reported in the West:
(a) A dead young mother was unearthed still breast-feeding her baby who has survived in her arms.
(b) A beautiful young girl who had just realized her ambition of being a primary school teacher was found dead protecting four students with her body, leaving behind a photo album full of her now- extinguished dreams and aspirations.
(c) A young Chinese student buried in the rubble for days asked for a cold can of Coca Cola on being discovered by rescuers and then had to have both his legs amputated. When volunteers greeted him with tears after the surgery, he just asked them not to cry and said he was alright.
(d) A father was waiting to be removed from tons of concrete, saying to his anxious wife that all he wanted for the rest of his life was to be with her and their child. Those were his last words.
(e) Right in the epicenter, the decimated Beichuan Middle School re-opened with the National Anthem on 19 May in make-shift premises for its grief-stricken surviving students, many of whom lost their parents and close relatives.
There are many, many more of these moving true-life scenes, watched real-time on television: scenes of heroism, compassion, humanity and fortitude that have dramatically united China as a country and changed perceptions of China across the world.
As the whole of China is gearing up to the Beijing Olympics this summer, she stands an even better chance of making this the best Olympics ever as world opinions have markedly softened towards her in the wake of this historic catastrophe. From the highest leaders to the ordinary citizens, China's response of great perseverance, compassion, courage, dedication, unity, transparency and efficiency has won hearts and minds both inside and outside China. Across the world, there has been an outpouring of heartfelt support, empathy and praise. All this is likely to make the Chinese people more poised and fortified to face the many challenges of building a better tomorrow.
Andrew K P. Leung, SBS, FRSA
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