China's Perfect Storm

Bedraggled and wet, Gao Biao stands in front of the Guangzhou train station with an umbrella in his hand and stares glumly at the crush of people in front of him. For the past year the 27-year-old has worked for a cosmetics factory in this southern Chinese city, and now he's trying to get home to see his mother near Suzhou in eastern China, 20 hours away by rail. He's going to miss his connection. Around him hundreds of people, all hoping to find seats, push toward an opening in the metal fence surrounding the station as a police officer shouts into a megaphone, calling for order. The hands of the giant neon green station clock tick closer to Gao's 9:56 p.m. departure time, but the line is as frozen as the temperature. "There's nothing I can do," he says. "I don't think I'll be getting on that train."

Gao is one of more than half a million travelers who were stuck outside the station in the closing days of January after some of the most severe weather in decades brought China to a virtual standstill. Unusually frigid weather and heavy snowfall severed crucial transport arteries including major rail lines, highways and airports; power outages rolled across 17 provinces, forcing factories and businesses to close. The southern part of the country, which hadn't seen snow like this since 1954, was woefully unprepared. Even more northerly cities such as Shanghai, which is near the coast, were staggered by winter's wallop. At least 49 deaths were blamed on the storms.

The weird weather hit at a particularly bad time. Every year, in what is often called the world's largest annual migration, an estimated 180 million mainlanders go on holiday or travel home to be with their families to celebrate the Spring Festival, also known as Chinese New Year. Millions of these travelers are migrant workers — the real dynamo driving China's economic boom — who leave behind their jobs in factories and construction sites across the country for one of the few vacations many are allowed to take. But this year is different. Bad weather is making travel impossible; millions have been stranded on their journeys home, and with meteorologists predicting more snow in the days ahead for the country's already reeling central and southern regions, the crisis only looks set to worsen.

In a country depicted these days as an economic superpower, the storms were a reminder that for all its gleaming new airports and 2.1 million miles (3.4 million km) of highways, China remains a developing nation with vulnerable, overtaxed infrastructure. Officials said the snow caused more than 100,000 buildings to collapse. Some 6,000 vehicles carrying 20,000 passengers were stranded on a highway linking the provinces of Anhui and Zhejiang. A rail line that serves as the main link between Guangzhou in the south and the capital Beijing in the north was disabled when heavy snow and ice in Hunan province knocked out power lines, leaving at least 136 trains idled, according to Xinhua, China's official news agency. In neighboring Hubei province, some 100,000 people were without drinking water for several days. In rural Guizhou province, an electrical tower collapsed under the weight of the snow, cutting off power for 41 cities and counties. The supply of coal to dozens of regional power plants was disrupted, resulting in electricity outages throughout the country.

A Shock to the Economy
Almost 500,000 troops were deployed to help restore transportation links and clean up the devastation, the largest military deployment for a natural disaster since devastating floods almost a decade ago. But the economic damage is already done. The Chinese government estimated storm-related losses at about $3 billion. Economists say this figure is bound to rise. "I'd guess in the end [the crisis] will shave a couple tenths of a percentage point off China's GDP growth this year," says Ben Simpfendorfer, a China economist with the Royal Bank of Scotland in Hong Kong. That's not much considering that the country's GDP growth rate was 11.4% last year. But the situation may have been made worse because factories were forced to close and shipments disrupted just as the country's industrial base typically cranks up production to make up for the one- or two-week breaks many manufacturers take for the New Year holiday.

Exporters will get off relatively lightly, because most are located in warmer coastal provinces near ports, says Stephen Green, senior economist at Standard Chartered Bank in Shanghai. Hardest hit will be producers that rely heavily on electricity such as aluminum and steel makers. But few companies will escape unscathed. Million Freight, a logistics company based in the normally balmy southern city of Shenzhen, was forced to stop taking new shipments on Jan. 28 because existing freight was stacking up. "Nearly all trains coming in and leaving from Shenzhen are delayed by seven or eight hours," says an executive at the company surnamed Feng. The company also owns more than 200 trucks but the snow "affects our highway transportation more than it does railways," Feng says. "We used to ship two 40-foot containers daily, but given the weather conditions, we stopped our truck traffic completely on the 25th." Although it's hard to give an exact number for the losses the company faces, they "will no doubt be substantial," Feng sighs.