The catastrophic floods that are sweeping away Chinese farms and factories and threatening major cities also may wash away some of the country's much-needed economic growth, financial experts say.
The Yangtze and Yellow rivers that cut through the heart of the country overflow so often, with such sudden destruction, that the Yellow is known as "China's Sorrow." This year, waterways in the industrial northeast are breaking their banks as well, increasing the potential devastation and economic disruption at a time when China can little afford it.This summer's floods have claimed thousands of lives, left millions homeless and caused an estimated $24 billion worth of damage so far, the government reports. The floods are concentrated in just a handful of provinces, but when railways are swept away, workers diverted from factory lines to man the flood's front lines and harvests destroyed, the effects trickle throughout the country in small but significant ways.
One of the biggest worries in Beijing is how the floods might drag down an already slowing economy, and whether the combination of newly homeless and burgeoning jobless could lead to social unrest.
The government has staked its credibility on achieving 8 percent growth this year to create new work for those thrown out of their jobs under China's market reforms. But reaching that target is unlikely, economists say.
"The floods could reduce GDP by about 1 percentage point," said Andy Xie, a China specialist at Morgan Stanley Dean Witter in Hong Kong, citing the damaged grain harvests and industrial interruption as the largest factors. That means projected output may fall short by about $7.7 billion this year.
"The floods are the most visible, but not the most important, reason behind China's economic slowdown," Xie said. The Asian economic turmoil has dried up a significant source of foreign direct investment and hit China's exports hard. But the biggest problems come from economic mismanagement at home, resulting in stockpiles of unsold goods and deflation, Xie said.
The economic damage wrought by the floods, combined with Asia's economic crisis, also might help minimize political fallout for not achieving growth targets: Natural disasters and external economic crises are not the government's fault. Beijing has enjoyed international praise for keeping its currency stable while its neighbors offer cheaper exports after devaluation.