The May 12 earthquake in China's western Sichuan Province has claimed more than 40,000 lives, but many economists expect the impact on overall growth to be limited, Businessweek reports. Many economists expect the natural disaster to have limited impact on the Chinese economy despite some power outages, communications breakdowns, and blocked roads in the mountainous region.

"In the short term, there will be a temporary disruption in industrial production, but it should recover very quickly," Mingchun Sun, a Hong Kong-based economist at Lehman Brothers. One reason, he says, is that the quake hit a rural area without a big manufacturing base. The province's industrial output only accounts for 3.9% of China's GDP, according to Merrill Lynch.

Sun notes that when a big earthquake hit Japan in 1995, it temporarily disrupted Japan's industrial output but the region quickly recovered in the coming months. "It's a big tragedy in terms of human life, but in terms of growth it's not a big deal," he was quoted as saying.

About the Author

Hayden Hong, the founder and CEO of Long Circle, has over a decade of outsourcing and consulting experience. Prior to founding Long Circle, Hong was the president and founder of MacaoDude, a consulting firm that counts among its clients Motorola, Nortel, and various high technology companies in the Boston 128 area. In 2005, Hong merged the two companies to provide U.S. companies with low-risk, convenient access to China’s engineering talent, manufacturing industry, and emerging markets. His background includes managing U.S.–China offshore R&D projects for GE, as well as management positions at Broad Reach Communications, a GE partner. Hong received a MSEE degree from Purdue University and a BSEE degree from Northeastern University, graduated magna cum laude.

About Long Circle

Long Circle provides outsourced engineering services to companies whose products and services rely on embedded software and hardware technology. Long Circle and the Long Circle China Center of Excellence enables U.S. companies to reduce costs, increase engineering bandwidth, and broaden market reach by providing low-risk, strategic access to China’s engineering talent, manufacturing industry, and emerging markets. To learn more about Long Circle, visit http://www.longcircle.com.