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Storms Freeze China's Retailers

The true economic impact of the powerful snowstorms won't be known for months, but they've already hurt traditional Chinese New Year's spending
More than 5.8 million people have been stuck at the train station as of Jan. 31, unable to go home for Chinese New Year's. The most severe snowstorms to hit China in more than 50 years has claimed 60 lives and caused $7.4 billion in economic damages.
More than 5.8 million people have been stuck at the train station as of Jan. 31, unable to go home for Chinese New Year's. The most severe snowstorms to hit China in more than 50 years has claimed 60 lives and caused $7.4 billion in economic damages.

Last year, before Tang Hao went home to the central province of Hunan for Chinese New Year, he spent more than $70 to buy cigarettes and clothes to take back as presents for his parents. This Chinese New Year's, though, Tang, 24, will stay in Beijing, where he works as an editor in a research institute. He can't get train tickets to his village in Hunan because of the severe snowstorms. "I haven't given much thought about buying presents. If I can't go back home, there's no way to get them to my family," he says.

For retailers and consumer-goods companies in China, the worst snowstorm to hit the country in more than half a century couldn't come at a worse time. Like Christmas in the West, Chinese New Year is China's hyperbuying period. Migrant workers and white-collar workers alike return home with their savings and bonuses to give to their parents. Children receive "hong bao," or red envelopes filled with money from relatives. Much of that is promptly spent on cell phones, clothes, and other coveted items.