28 January 2008

China News: Black Monday in Shanghai, Freezing Winter Catches China in Power Crisis

Continued sharp declines in Hong Kong and Shanghai stock markets are making a cold Chinese winter even colder. It does not help that energy supplies--including coal--are running low.
Hong Kong's Hang Seng Index ended the day down 1,068.76 points, or 4.25 per cent, at 24,053.61. Turnover was 107.7 billion Hong Kong dollars.....Shares fell even more sharply on the Shanghai stock exchange in what Chinese media called a "black Monday."

For the second time within a week, the Shanghai Composite Index dropped by more than 7 per cent in a single day, closing at 4,419.29, down 7.19 per cent....The Shenzhen Composite Index fell 6.85 per cent to 1,335.96 in the ongoing turmoil reflecting stock market developments around the Asian region. ____BangkokPost

The bad economic news comes at a time when China's energy infrastructure is stressed by cold, snow, and ice.
China's premier Wen Jiabao said the country's energy shortage, including coal and oil, will continue or even become worse due to the recent heavy snow and rain in Southern China....Mr. Wen urged local authorities to secure production and supply and added that the bad weather in southern China will continue for the next 10 days, which will have a serious impact on people's living and energy supply.

He said areas facing a power shortage should cut the supply to power-hungry firms. Mr. Wen's comments were posted on the government's Web site yesterday....China is facing a nationwide power shortfall because a drop in coal inventories is forcing power stations to cut output and heavy snowstorms have damaged the power grid. Southern China's coldest, snowiest winter in decades has left millions of Chinese without heat and running water, causing mounting losses from power shortages and other damage.

The government has issued a wide-reaching order to speed food shipments. The order calls on police, railway bureaus and even gas stations to do all they can to ensure timely delivery of food supplies after snow and ice storms clogged roads, cut electricity and delayed deliveries.____WSJ

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