Tuesday, June 10, 2008

Private Sector Investment After Sichuan Earthquake

Financial Times

Taiwan has been quick to offer aid to China in the wake of the massive earthquake that killed 70,000 people and left 5 million homeless. As much as the aid has helped China rebuild its Sichuan province, some experts think that Taiwan has more to offer than just monetary aid.

Taiwan suffered a large earthquake on September 21, 1999 that mirrors the recent earthquake in China, but on a smaller scale. The Taiwanese earthquake killed 2,500 people and left 50,000 people homeless. Like the recent earthquake in China, the 1999 earthquake in Taiwan hit rural, mountainous regions of the country that rely on agriculture and tourism for livelihood.

In the aftermath of its 1999 earthquake, Taiwan was quick to set up plans for reconstruction. Taiwan collected private donations and created the 921 Earthquake Relief Foundation, which was run by private sector investors. Allowing private investors to work directly with local citizens in the damaged parts of Taiwan increased efficiency, removed bureaucratic hurdles, and encouraged citizens to actively participate in the rebuilding process.

Officials in Taiwan are unsure how much of their country’s success can be applied to the rebuilding problems China faces. They are, however, optimistic and are asking Chinese officials to review and apply the successful strategies of the 921 Earthquake Relief Foundation.


Given the Chinese government’s history of strict control over its citizens, how likely is it that China would allow private investors to call the shots?

Will the difference in scale between the Taiwanese and Chinese earthquakes affect the effectiveness of private sector investment?

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