December 02, 2008

China to inject capital into state firms hit by earthquake damage

XFN Asia cited Mr Liu Nanchang vice director of the performance assessment bureau of the state owned Assets Supervision and Administration Commission as saying that China will inject capital into central government controlled enterprises that suffered heavy losses from the May 12 earthquake.

Mr Liu in a statement said that for firms experiencing difficulties in production and operations, such as Dongfang Electric Group, SASAC will provide a capital injection from the state capital budget. But he gave no details on the capital injection.

He said that a total of 3,586 people connected with central government firms were killed or injured in the May earthquake, and total economic losses stood at CNY 81.5 billion including CNY 41.4 billion in direct losses.

Mr Liu said the State Grid Corp of China, Dongfang Electric, China National Chemical Corp and Panzhihua Iron & Steel Group were among the most severely affected. He said that "From the overall point of view, economic development will not be severely affected by the earthquake, although natural disasters including the quake and heavy snowstorms in late January have been a drag on economic growth.”

He added that even without the two disasters, the economic situation has not been encouraging because of high oil prices and a slower US economy.