Zhang Yuanhong, a researcher at the Rural Development Institute under the Chinese Academy of Social Sciences, said that damage to its agricultural output will be limited because the mountainous area where the earthquake struck is not a leading grain production base. The views of experts were evidenced by the unshaken stock market on the first trading day after the quake on April 22. Both the Shenzhen and Shanghai stock markets remained largely flat, but some shares closely related to the events in Sichuan did react, particularly cement, construction materials and medical stocks.

Measures

Immediately after the shock, the central authorities, including the People's Bank of China, the country's central bank, the Ministry of Commerce (MOFCOM), the China Banking Regulatory Commission (CBRC) and General Administration of Customs (GAC), held a special conference on measures to restore financial order in the aftermath of quake-hit regions. The central bank pledged to ensure financial stability, liquidity and the timely allocation of relief money. The MOFCOM launched a contingency plan to ensure enough materials were supplied to rebuild the area. The GAC opened a green channel for inbound commodities and transportation facilities that are related to the relief work. A 24-hour window was set up for those items with simplified entry procedures. In an emergency, those items can be given customs clearance without paperwork, which can be given to the GAC afterward.

The CBRC, the country's banking regulator, issued regulations to restore banking networks and simplify procedures for earthquake-stricken citizens to deal with any bank-related financial issues.

Local banks, such as the Sichuan subsidiaries of Agricultural Bank of China and the Rural Credit Cooperative and Postal Savings Bank of China, sent out shuttle buses to victim settlement sites to deliver financial services.

A more important task is reconstruction work in the quake zone, which will receive financial support from all over China, including donations from individuals and companies and the reconstruction fund earmarked by the Central Government.

After the catastrophe, companies from all fields made donations to the district through official channels or grassroots NGOs. The total amount can hardly be calculated for now, but the early donations are telling. For instance, Samsung donated 60 million yuan ($9.71 million); Apple Inc., 50 million yuan ($8.1 million); and Tencent, a leading Chinese IT company, donated 5 million yuan ($809,500).

Zhang Yongjun, Deputy Director of the Economic Research Department of the China Center for International Economic Exchanges, said despite the hefty donations from around the globe, after-quake reconstruction will mainly rely on government allocated fund. "It's hard to predict the amount of investment for the reconstruction," Zhang said.

Back in the 2008 Wenchuan earthquake, there were concerns about over-investment and repetitive construction. How to coordinate the reconstruction work will be a test for the Chinese Government. "We should ensure the funds are used efficiently by formulating an overall reconstruction plan in advance and setting up a coordination system," said Zhang.

Yu Fenghui, a renowned business commentator, said that except for money allocation, more flexible financial policies should be formulated for the region.

"Tax cuts can be a way to spur enthusiasm for private capital's investment in the quake zone. On the one hand, the government can encourage donations to the quake zone by offering tax cuts to donors. On the other, if private businesses invest in the reconstruction in the quake zone, all taxes should be exempted," said Yu.

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