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“A Complete Failure of Governance”

Since snow started falling in the second week of last month, southwestern, central, eastern, and southern China have been gripped by a massive storm. About 105 million people have been affected in 17 provinces. Some 2.5 million of them have been or will be evacuated. Around 30 million have lost electricity. A quarter of a million troops have been mobilized to shovel snow and provide emergency relief. Approximately 16 million livestock have been killed. The storm will continue through at least the second week of this month, according to the China Meteorological Administration.

The snow could not have come at a worse time. Tens of millions of workers are on the move, making their once-yearly trip home for Chinese New Year, which begins next week. Hundreds of thousands of desperate, weary, and angry travelers, most of whom depend on the rails, are now stranded. On Wednesday, Premier Wen Jiabao went to the Guangzhou train station to calm distraught passengers through a megaphone. About 217,000 travelers were stuck in that city, the capital of southern Guangdong province. Security around the nation has been tightened where crowds have gathered. The ruling Politburo met on Tuesday in emergency session.

The storm is, according to the Foreign Ministry in Beijing, “historically unprecedented.” The official People’s Daily calls it “the worst in 50 years.” Beijing can’t be blamed for the weather, but central government policies have severely aggravated the suffering. “What has appeared to be a natural disaster is, in essence, a massive failure of governance,” said Mao Shoulong of Renmin University. Attempts at central planning have turned an unusual weather pattern into a national disaster.

There are about a dozen wrongheaded policies that have aggravated the situation, but the most misguided of them are the central government’s price controls on energy, needed to power the trains to take people home. Beijing technocrats have been waging an unsuccessful campaign to slow accelerating inflation. As an integral part of that effort, the National Development and Reform Commission, China’s top economic planning agency, has put a ceiling on electricity charges. The NDRC in the last few days has been insisting that its cap has not led to the decline in the generation of power that is aggravating the ongoing crisis, but its case is unconvincing. The trains won’t move unless there is electricity, and there is an electricity shortage due in large measure to overregulation of the economy. There is also a national shortage of coal, used to generate most of the country’s electricity, due to a result of a mix of central government measures.

China needs better weather, but more important it needs a more open economy. The forecasters say the snow will stop sometime this month. Unfortunately, that will be long before the country gets better economic planning.



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