China floods hit economy
Slowdown in growth seen as agricultural and industry output fall
August 7, 1998: 11:47 a.m. ET
BEIJING (Reuters) - Rampant flooding along China's Yangtze River is ravaging crops and stalling industrial production, further dimming hopes that the government will achieve its economic growth target for 1998, economists said Friday.
"The agricultural sector has been and will be the hardest hit by the floods this year," said an economist with the Unirule Institute of Economics, a local private think-tank.
Agricultural output has accounted for about 20 percent of China's annual gross domestic product. But statistics compiled since record-breaking floods began in July are casting a shadow over that figure, economists said.
The State Statistical Bureau says China's 1998 summer grain output had fallen 11 percent from last year to 113.1 million metric tons because of the floods.
Grain planted in April and May to be reaped in September and October also will be severely affected by the floods, an economist at the cabinet's State Information Center said.
The floods, exacerbated by the arrival of Typhoon Otto this week, have killed more than 2,000 people and affected 240 million, one-fifth of China's population and roughly equal to that of the United States.
About 53.2 million acres of farmland have been affected, with 11.8 million acres of crops destroyed.
And the economic impact isn't limited to agriculture.
Industrial output, which constitutes about half of China's economy, has been crippled along the Yangtze river, especially in the central city of Wuhan, where power supplies have been cut and transportation disrupted, economists said.
Flooding had affected 4,120 enterprises in Wuhan alone, state media reported last week.
China already had expected to struggle to achieve its economic growth target of 8 percent this year amid Asia's financial crisis and a domestic slowdown.
First-half growth amounted to 7 percent, 1 percentage point below what Premier Zhu Rongji has targeted as necessary to ensure adequate employment opportunities for China's jobless.
Without new measures, "It will be very, very difficult to reach the economic goal," the Unirule economist said.
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