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.
The Barclays report also pointed out inflationary risks following the quake, but noted that the impact may be temporary.
Government stimulus to counterbalance losses
In the long term, the money that the Chinese government will invest in rebuilding will "far counterbalance" the losses caused by the earthquake, Foudy said.
"I think what they (the Chinese government) are already doing, which is to say, is to maximize humanitarian aid right now, and then to start planning the rebuilding over the next several quarters," the professor said.
"They are going to probably at some point do some sort of stimulus, even if it's localized on a smaller scale, to help out people in that area," Mark Otto, director of Knight Capital Americas LLC, told Xinhua on Tuesday.
"So that's something that may impact the Chinese economy as a whole going forward in the near term, because that might be one of the first stimulus packages that we are going to see of this year, " Otto said.
The Barclays report, using the Wenchuan earthquake as an example, forecasts that spending on post-quake reconstruction could be between 100 billion and 200 billion yuan, around 0.2 percent of the national GDP.
Construction, real estate industries to take benefit
Foudy said that in the next week, the Chinese government will obviously still be in a recovery mode, getting medicine, water and other necessities to the quake-affected people.
After that, he said, the government will start looking at reconstruction and assembling extra funding from the central or provincial government to start rebuilding.
"It will be a slight boost to local construction because there will be a lot of rebuilding efforts that are going to the province. What we saw after the last earthquake, which was much larger, was that Sichuan provinces' growth far outpaced the rest of the country," the professor said.
Talking about the earthquake's impact on the Chinese stock market, Otto said the most affected sectors could be any that has to do with finance, insurance and real estate.
"If the government takes this opportunity to actually do some sort of stimulus," Otto said. "There are sectors that might be bolstered from that, anything that deals with construction. As a result, they will actually get a boost perhaps."
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