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O 011127Z FEB 08 ZDK
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 4798
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C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 000390 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/01/2033 
TAGS: PGOV PROP ECON ELTN SOCI CH
SUBJECT: WINTER STORM CONTINUES TO WREAK HAVOC; CENTER 
FOCUSES ON ENERGY AND TRANSPORTATION; MORE SNOW PREDICTED 
 
REF: A. BEIJING 386 
 
     ¶B. BEIJING 335 
     ¶C. GUANGZHOU 62 AND PREVIOUS 
 
BEIJING 00000390  001.2 OF 004 
 
 
Classified By: Political Internal Unit Chief 
Dan Kritenbrink.  Reasons 1.4 (b) and (d). 
 
Summary 
------- 
 
¶1. (C) China's worst snowstorm in 50 years continues to wreak 
havoc across southern and central parts of the country. 
Although some transportation networks over the past two days 
have started to return to normal, hundreds of thousands of 
travelers remain stranded and millions of residents face 
hardships caused by blackouts and energy shortages. 
Meanwhile, the weather refuses to cooperate:  China's 
National Meteorological Center issued an "orange alert" on 
February 1, predicting medium-to-heavy snow throughout much 
of the disaster areas.  PRC leaders have emphasized ensuring 
energy supplies and restoring transportation networks, with 
President Hu Jintao visiting coal mines in Shanxi Province 
and a coal-related port in Hebei Province on January 31.  The 
State Council held a special press conference February 1, 
during which officials praised the Government's hard work and 
"strong and timely measures."  China's propaganda apparatus 
has told reporters not to dwell on deficiencies in the 
Government's response but instead focus on positive, 
forward-looking coverage.  Regarding the storm's economic 
impact, a top government statistician said its effect should 
be short-term in nature but that the storms would likely 
prompt the Government to review the adequacy of its 
infrastructure and its capacity to monitor major disasters. 
Damage to the winter wheat crop and rapid increases in 
produce prices have prompted speculation that inflation, 
presently the Government's top economic concern, will hover 
at 11-year highs for longer than expected.  End Summary. 
 
State Council Holds Special Press Conference 
-------------------------------------------- 
 
¶2. (U) As PRC authorities continue to grapple with the havoc 
caused in southern and central China by the worst snowstorm 
to hit the country in 50 years, the State Council Information 
Office (SCIO) convened a special press conference on the 
afternoon of February 1 to review the storm's impact and 
describe the government's relief efforts.  Representatives 
from the National Development and Reform Commission (NDRC), 
Ministry of Civil Affairs, Ministry of Railways, Ministry of 
Communication and the General Administration of Civil 
Aviation of China (CAAC) spoke at the event.  Officials 
stated that the abnormal weather has affected 19 provinces, 
with Hunan, Hubei, Guangxi, Jiangxi and Anhui having been hit 
the hardest.  By January 31, the storms had caused RMB 53.7 
billion in economic losses, 60 deaths and the evacuation of 
1.75 million people.  In response to questions from domestic 
and overseas journalists, officials denied that preparations 
for the disaster and subsequent relief work had been too slow 
or insufficient.  The officials praised the hard work and 
"strong, timely measures" of Government departments on all 
levels and expressed confidence that life will soon return to 
normal and China's "rapid economic growth will continue." 
Deputy Director of the NDRC Bureau of Economic Operations Zhu 
Hongren said the Government had established a "command 
center" under the NDRC's guidance that is coordinating 
official relief efforts. 
 
More Bad Weather Forecasted 
--------------------------- 
 
¶3. (C) The weather continues to make efforts to respond to 
the snow disaster more difficult:  China's National 
Meteorological Center (NMC) on February 1 issued an "Orange 
Alert," predicting medium-to-heavy snows for today in various 
areas of Guizhou, Hubei, Anhui, Jiangsu, Zhejiang, Jiangxi, 
Sichuan and Yunnan Provinces.  In addition, the NMC warned of 
freezing rain in parts of Guizhou, Hunan and Jiangxi.  The 
Center also issued guidance for the public to avoid 
unnecessary outdoor travel and to shore up temporary 
structures vulnerable to collapse.  (Note: Construction 
workers in China typically live on job sites in 
pre-fabricated, temporary dwellings that frequently collapse, 
even without the added weight of snow.) 
 
"Transport Networks Returning to Normal" 
---------------------------------------- 
 
¶4. (U) Though transportation networks have been affected most 
by the storms, the NDRC announced on February 1 that some 
progress was being made in returning at least some networks 
to normal, even as serious problems remained.  According to 
 
BEIJING 00000390  002.2 OF 004 
 
 
an NDRC statement carried by Xinhua, the Jing-Zhu Highway (a 
primary artery from Beijing to Zhuhai in Guangdong Province) 
was no longer blocked but some sections remained extremely 
jammed.  The NDRC said that as of Thursday evening, 12,990 
vehicles on the highway carrying 54,376 passengers were still 
"held up" in traffic. The NDRC release said railway officials 
were moving diesel engines onto areas of the 
Beijing-Guangzhou line to pull trains in sections where 
electricity remained out.  The NDRC reported that air travel 
was returning to "normal," though 135 flights were cancelled 
January 30-31 and over 900 were delayed.  About 22,000 
passengers remain stranded in airports, 6,100 in Hunan 
Province airports alone. According to the Xinhua News Agency 
Website, on Thursday, eight medium and small sized airports 
remained closed and 900 flights experienced delays. 
 
"The Coal is Getting Through": Hu Jintao Visits Miners 
--------------------------------------------- --------- 
 
¶5. (U) The personal intervention of top leaders to ensure 
energy supplies was another focal point of official media on 
February 1.  Chinese newspapers gave heavy coverage to 
President Hu Jintao's visit January 31 to coal mines in 
Datong, Shanxi Province, and to Qinhuangdao Port in Hebei 
Province, though which much coal is shipped.  The People's 
Daily reported Hu's trip under the headline "Work Together to 
Win a Full-Fledged Victory on Countering Disaster."  China's 
media February 1 also devoted extensive coverage to Premier 
Wen Jiabao's speech to a national conference on safeguarding 
supplies of power, coal, and oil.  One Xinhua release 
reported that coal shipments on the Beijing-Hangzhou Grand 
Canal have doubled since January 25.  Coal barges are also 
getting preferential treatment at locks and other choke 
points along waterways.  Meanwhile, Xinhua News Agency 
reported the People's Liberation Army Air Force has devoted 
four IL-76 transport aircraft to the relief efforts. 
 
"Media Should Not Dwell on Past Mistakes" 
----------------------------------------- 
 
¶6. (C) Reflecting the center's desire to carefully manage 
press coverage of the disaster, Zhou Qing'an (strictly 
protect), a journalism professor at Tsinghua University and 
an editorial writer for the Xinjing Bao (Beijing News) 
newspaper, told PolOff February 1 that the Communist Party 
Propaganda Department issued a directive that media cannot 
"reflect" (fansi) upon past events leading up to the 
disaster, but instead must give positive, forward-looking 
coverage of the current Government response.  Still, the 
media can get away with criticizing local governments, i.e., 
those below the provincial level, for poor crisis management. 
 Zhou penned an editorial in the January 31 edition of 
Xinjing Bao praising the efforts of the many ordinary 
citizens who have provided help to stranded travelers while 
criticizing the profiteering that had occurred in a "small 
number" of areas.  Some shop owners in areas with many 
stranded travelers, Zhou wrote, were charging as much as RMB 
50 (USD 7) for a package of instant noodles (an item that 
normally costs around RMB 3).  On February 1, the Xinjing Bao 
ran another editorial (not penned by Zhou) calling on China 
Central Television, government monopolies like oil-giant 
Sinopec and rich Chinese to do more to raise money for 
disaster relief. 
 
"Domestic Media Does Not Have Ful Picture" 
------------------------------------------- 
 
¶7. (C) Zhou further commented that China's own media does not 
have a complete grasp of the story due to the extreme 
difficulties of traveling to and reporting from the disaster 
areas.  Xinjing Bao has dispatched 10 reporters to Guizhou 
and Hunan Provinces, but most are themselves stuck in the 
transport gridlock and unable to file stories.  One Xinjing 
Bao journalist who made it to Guizhou, Zhou said, has had to 
file his story over the phone due to the lack of electricity 
there. 
 
"Three Days Without Food" 
------------------------- 
 
¶8. (U) Despite the prevalence of positive reporting, some 
newspapers still ran less-than-rosy accounts of the disaster. 
 The Nanfang Dushi Bao (Southern Metropolis) carried a story 
February 1 of a bus that has been stuck in traffic on the 
Jing-Zhu Highway since January 25.  The paper quoted the bus 
driver as saying the passengers had gone without food for 
three days.  As of mid-day January 31, the paper reported, 
the bus had been diverted to a secondary road and the driver 
was looking for a town where the passengers could get food. 
Some buses on the Jing-Zhu have been stranded for up to eight 
days, the story said. 
 
BEIJING 00000390  003.2 OF 004 
 
 
 
¶9. (SBU) International criticism of China's slow official 
response is leaking back into the country.  The Global Times, 
one of several papers in China consisting almost entirely of 
translated foreign news articles, ran stories February 1 from 
the U.S. and South Korean press commenting on how the storm 
reveals China's economic vulnerabilities and that the Chinese 
government initially showed a lack of concern over the 
snowstorms. 
 
From ConGen Chengdu:  Guizhou Braces For More Snow 
--------------------------------------------- ----- 
 
¶10. (SBU) One of the areas hardest hit by the storm is 
Guizhou, China's poorest province.  A Guizhou Foreign Affairs 
Office official told Chengdu ConGenOff February 1 that the 
weather in Guizhou is getting "better," but the overall 
situation remains "serious."  Expressways are open to 
limited, low-speed transportation, he said, and widespread 
areas of the Province, including parts of Guiyang City, are 
still experiencing power outages.  Local press reports reveal 
concern, especially in southeast Qian Prefecture, that more 
bad weather is on the way.  Market prices for food in Kaili 
and Qian Prefecture, according to local media, are up as much 
as 100 percent. Qian Prefecture badly needs additional food 
supplies and candles, press reports said. (Note:  One concern 
in Guizhou is that many remote mountain villages, populated 
largely by the elderly and young children as most working-age 
people have migrated to the cities, have been cut off for 
days now without power.  Demonstrating the seriousness of the 
situation, one local official was quoted in regional media as 
saying these villages will have to hold out by relying on 
"traditional hunting skills."  End note.) 
 
Storms Reveal Weak Infrastructure 
--------------------------------- 
 
¶11. (C) As for the economic impact of the storms, National 
Bureau of Statistics Director General of the Department of 
Comprehensive Statistics Li Xiaochao commented to EconOff 
February 1 that the effect of the snowstorms on economic 
performance is likely to be short-term in nature.  He 
suggested, however, that China needs a better system for 
assessing damage and informing policy decisions when 
disasters strike.  He compared the snowstorms to the 2003 
SARS outbreak, noting that officials learned from weaknesses 
exposed in the Government's response to launch reforms in the 
public health system.  Li predicted the storms would prompt 
the Chinese Government to review the adequacy of its 
infrastructure and its capacity to monitor and evaluate 
conditions when challenged by an event of this magnitude. 
Other economists have suggested the storms will prompt China 
to invest further in transportation and power transmission 
infrastructure and that this could help offset economic 
slowing caused by an anticipated downturn in developed 
country export markets. 
 
Food Inflation Troublesome 
-------------------------- 
 
¶12. (SBU) There is growing concern that the snowstorms will 
further drive up inflation, the government's top economic 
concern, just as the National People's Congress (NPC) 
prepares to convene March 5.  The consumer price index, 
primary driven by pork and cooking oil price increases, has 
been running above six percent since last August and has on 
two occasions hit 11-year highs.  Two of our economist 
contacts have already warned that the January data will very 
possibly exceed seven percent, creating headlines chronicling 
yet another mini-record in the weeks before the NPC. 
Depending on the scale of the crop damage due the snowstorms 
and the duration of food/goods distribution problems, food 
prices may continue their upward climb.   State media has 
reported vegetable prices up more than 50 percent in 11 
provinces and up 100 percent in some areas. 
 
¶13. (SBU) Royal Bank of Scotland China Economist Ben 
Simpfendorfer pointed out in a February 1 research note that 
grain prices have recently started rising, adding another 
element to food inflation.  Apparent storm damage to the 
winter wheat crop (85 percent of wheat production) would 
exacerbate this trend, he noted.  Seemingly mindful of these 
concerns, Chen Xiwen, director of the Office of the Central 
Leading Group on Rural Work, told media January 31 that 
although there has been a "catastrophic" impact on fresh 
vegetables and fruits in some areas, inflation should come in 
around 6.5 percent for January. 
 
Beijing West Station Calm, Lots of Tickets To Spare 
--------------------------------------------- ------ 
 
 
BEIJING 00000390  004.2 OF 004 
 
 
¶14. (SBU) Although the situation elsewhere in China remains 
serious, the impact of the storm remains hard to detect in 
sunny Beijing.  PolOff visited Beijing's West Station, the 
starting point for many south-bound trains, January 31.  The 
station was calm and not crowded, though the People's Armed 
Police presence was greater than at the main Beijing train 
station the day before (ref B).  A migrant from Henan 
Province told PolOff he had four relatives stuck in Guangzhou 
unable to purchase tickets to Henan.  The man noted 
pessimistically that more snow was still expected.  Two other 
migrants, however, from Hubei and Hunan Provinces, 
respectively, commented that train tickets, usually 
impossibly scarce the week prior to the Chinese New Year 
holiday, are now readily available, apparently because so 
many travelers have cancelled plans to head south.  The same 
was not true, however, for bus tickets.  PolFSN contacted 
Beijing's main bus station January 31 and was told all buses 
to Wuhan, Hubei Province are suspended until further notice. 
RANDT