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Snow crisis triggers reconstruction boom
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A number of equipment vendors have already benefited from the investment spree. Homegrown Tebian Electric Apparatus, a Xinjiang-based company, was poised to replace Switzerland's ABB to become the world's largest maker of transformers in 2007. The company's Shanghai-listed A shares more than quadrupled in value last year, beating the benchmark Shanghai Composite Index that almost doubled.

Besides power equipment vendors, some other companies will also profit from the spending to rebuild key infrastructures in telecom, railways and roads. In the past two months, China Telecom, China Mobile and China Unicom, the three major telecom operators, registered a direct loss of 2.79 billion yuan in equipment and facilities. China Telecom alone had 100,000 of its telecom stations damaged in the blizzards.

Shenzhen-based telecom equipment supplier ZTE Corp is expected to corner most of the telecom operators' 1 billion yuan repairs budget, according to Chen Yunhong, an analyst with Sinolink Securities.

The reconstruction process may also prove to be a boon for construction materials such as concrete and steel. According to the Ministry of Civil Affairs, 485,000 buildings collapsed in the snowstorms while the roads in the storm-stricken areas would need a major facelift as the chemicals used to melt the snow left the roads badly damaged.

"Railways is another sector that needs attention," says Chu Hai, transport analyst with Sinolink Securities. "The government is likely to speed up its already aggressive investment budget to ease the transport bottleneck."

The blizzards paralyzed much of the nation's railway network and froze the coal transports from China's north to south. This, in turn, forced the power plants in southern provinces to shut down, exacerbating the chaos.

China has been investing heavily in its railway network, which carries 25 percent of the world's railway traffic on just 6 percent of the total tracks, according to the World Bank.

The nation is trying to boost its operational railway lines from the current 78,000 km to more than 90,000 km by 2010. The government has earmarked 1.25 trillion yuan for network construction during the 2006-2010 Plan period, four times the amount set aside in the previous Plan period.

(China Daily March 3, 2008)

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