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Global cooling crisis in China

Soldiers carry a pole to repair a damaged power supply tower in Zhuzhou county, Hunan province, on Feb. 9. Reuters/China Daily

Global cooling crisis in China: RECORD WINTER exacerbates RECORD INFLATION rates - China’s food prices rose at an official 18.2 percent in January, bringing an official consumer cost of living rise for the 11th consecutive month to an official 7.1 percent — the LARGEST INCREASE IN MORE THAN A DECADE even with often understated official figures. Although official government economists and spokesmen have been playing down its effects, the worst weather in more than 60 years has played havoc with all aspects of the Chinese economy and is accelerating inflation. All this will impact China’s manufactured goods exports and its growing weight as a consumer of raw materials — especially energy. Since mid-January, China has seen three large-scale snowfalls, one after the other — the strongest snow and ice storms in 60 years. Some Chinese analysts compare this storm with the SARS crisis in 2003, and conclude that China’s economy will be greatly affected, at least over the shorter and medium term, and perhaps even with long-term structural effects. It is early but the Chinese disaster is going to impact the world economy. For a while, China’s exported goods will be reduced, thereby affecting international supplies, and to some degree cause a price rise for the importers. The coal price in the world market has been rising for seven weeks in a row largely due to the reduced export and more import of coal from China. The sustained shortage of coal supply will spill over to oil and trigger a new round of oil prices hikes.

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