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Typhoon Mangkhut

Southern China counts cost of Typhoon Mangkhut – and more billion-dollar storms

Death tolls are down but damage bills are up as population and development pressures leave the region more exposed to disaster

PUBLISHED : Tuesday, 18 September, 2018, 3:57pm
UPDATED : Tuesday, 18 September, 2018, 4:28pm

The financial toll from the most powerful typhoon to hit China this year could be in the billions of yuan, officials and analysts estimate, adding to the ever-growing economic cost storms are taking on the country’s coastal areas.

In addition to the four people dead in Guangdong province and the more than 100 dead or missing in the Philippines, China Insurance News reported on Tuesday that more than 140 million yuan (US$20.4 million) in damage claims related to Typhoon Mangkhut had been submitted from Shenzhen alone and another 540 million yuan from the rest of Guangdong province before noon on Monday.

Mangkhut made landfall in southern China on Sunday and by Monday night the Guangdong government estimated the direct economic losses for the province were at least 4.2 billion yuan. In Guangxi, the damage bill was about 51.75 million yuan, well below some forecasters’ expectations.

The China Meteorological Administration said it expects will Mangkhut continue to weaken and be over by Wednesday.

But while the storm may be fading, China’s battered economic powerhouse was still limping back into production on Tuesday, with industrial output slowly resuming and emergency crews clearing debris from roads.

Typhoon Mangkhut damage costs expected to soar, with insurance companies set to bear the brunt

Shenzhen-listed Jianglong Shipbuilding said it suffered no loss of life from the storm but damage to its production facilities, warehouses, stockpiles and ships amounted to about 5 million yuan.

It said its main assets were insured and it had filed claims to recover the losses.

During the first half of this year, Jianglong recorded a net profit of 7.4 million yuan, more than half the total for same period last year, mainly because of deep cuts in government subsidies, according to stock exchange filings. It had about 175 million yuan in fixed assets at the end of the first half.

Chuck Watson, a disaster modeller for Enki Research in the US city of Savannah, initially estimated that mainland China’s losses from Mangkhut could be as much as US$100 billion. That was on top of the US$20 billion in damage inflicted on Hong Kong.

But Watson said he had revised down the estimate for China to about US$32 billion, including US$18 billion in Hong Kong.

Dylan Bryant, head of North Asia for insurer Swiss Re Corporate Solutions, estimated that Mangkhut could cost Hong Kong up to US$721 million per day.

Research suggests that typhoons inflict severe but short-lived damage on local economies.

In a 2015 research paper, a team led by University of Birmingham economics professor Robert Elliott said that if a typhoon destroyed up to half of the property in an area, the economic activity could fall by 20 per cent over that year.

The team analysed historical typhoon data and night-light intensity data from satellites from 1992 to 2010, and found that annual losses from typhoons in coastal China were US$1 billion on average, a third of which was a result of greater exposure of the coastline and rapid economic growth.

The paper said that over 70 per cent of China’s cities and half of the population were in areas hit frequently by major natural disasters.

Typhoon Mangkhut bill could set Hong Kong record of US$1 billion in insurance claims

That assessment correlates with official analysis. The China Meteorological News, the China Meteorological Administration’s official publication, reported in February that economic losses from typhoons had increased significantly over the past 30 years, mainly because of massive development and an influx of people into the affected coastal regions.

But the annual death toll from typhoons had fallen by 90 per cent over the past decade, it said.