Sichuan Quake Relief (SQR)

Report on post-quake rebuilding from the UK’s Financial Times:

The Chinese government will fund just a fifth of the estimated RMB 3,000 billion cost of reconstruction and development in earthquake-affected Sichuan, leaving businesses and state-owned banks to pay for the rest, provincial officials said on Friday. Even as economic officials issue warnings that China’s economy is cooling much faster than expected as a result of the global crisis, Sichuan officials said they were optimistic that state-owned companies and the private sector would invest in the disaster zone.

“The government’s investment will encourage all kinds of investment from society to help us rebuild Sichuan after the quake,” said Wei Hong, executive vice-governor of Sichuan Province, at a press conference. “We will seek loans from domestic banks, financing from capital markets and donations from the public to make up the rest of the needed investment.”

The government appears to be ordering state-owned banks to shoulder much of the burden of a giant fiscal stimulus package announced last week at a time when they face slowing profits and rising bad loans. China’s benchmark stock index has fallen by nearly 70 per cent from the peak it reached last October and regulators have effectively suspended approvals for new listings.