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Lushan quake to have limited impact on China economy

Xinhua | Updated: 2013-04-26 16:09

NEW YORK - The recent deadly earthquake in China's Southwest Sichuan province will only have a limited, regional impact on the Chinese economy, said a number of economists and analysts.

The experts also projected that certain local industries affected by the earthquake will be bolstered by the government's expected post-disaster stimulus.

The 7.0-magnitude temblor, which struck Lushan county in Sichuan's Ya'an city on April 20, has so far left 196 people killed, 21 missing and more than 13,400 injured.

Quake losses to be limited and regional

"I think the economic cost will be relatively small for a smaller earthquake hitting a more rural area," Joseph Foudy, an economics professor at New York University, told Xinhua on Wednesday.

Particularly, he noted, the losses would be less than those caused by the 8.0-magnitude earthquake that wreaked havoc at Sichuan's Wenchuan county in 2008.

"I think the effects will basically be regional," Foudy said.

From a geographical perspective, "the quake zone is mainly limited to just one prefecture which is economically unimportant," Bank of America Merrill Lynch's economists said in a report.

Chinese official statistics for 2012 showed that the gross domestic product of Ya'an accounted for 1.67 percent of the provincial GDP and 0.07 percent of the national total.

Additionally, only a couple of counties in remote mountainous areas with small populations were affected, the BOA report said.

Unlike in the case of the Wenchuan quake, which severely damaged some industrial towns in Sichuan, no significant manufacturers were situated in Ya'an, it added.

"We probably will not see visible losses of industrial production or GDP activity," the BOA report said.

Given the magnitude and location of the quake and the number of people affected, "I don't see any effect on the larger Chinese economy, stock market or other parts of the year, Asian economy, either, for that matter," Foudy said.

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