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Mulling the Impact of China's Snowstorms

Fund managers and analysts worry about the mainland's infrastructure and food-driven inflation, but others expect the damage to be manageable

China's worst snowstorm of the century, which started in January, has raised alarm bells particularly related to the potential impact on the mainland's already problematic infrastructure and inflation. But some are saying the threat to the mainland's economy is manageable.

Tao Dong, chief regional economist at Credit Suisse in Hong Kong, notes that power shortages and transport disruption have been the biggest casualties of the snowstorm. Around 78% of China's power is derived from coal-fired plants. Without trains to deliver coal freight, the National Power Grid says its latest coal inventory has fallen to just 16.58 million tonnes an all-time low that's just barely sufficient for seven days worth of production.