Regional effects of natural disasters in China: investing in post-disaster recovery

We examine the effects of natural disasters on income and investment in China. Using macroeconomic province-level data and the provincial history of disaster exposure over the past two decades, we describe the relationship between disaster mortality and morbidity, disasters’ economic damages, government investment and regional economic activity, and infrastructure development. The Chinese government’s aggressive investment in post-disaster reconstruction is discussed, and the implications of this investment for post-disaster private sector economic activity are analyzed empirically. We further investigate the differential effects of natural disasters on economic activity in China’s diverse geographical regions.