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By Bloomberg News
(Bloomberg) — China detained the owners of a hazardous- chemicals storage warehouse rocked by deadly explosions in Tianjin as authorities sought to discover the cause of the latest industrial accident to hit the country.
The executives of Tianjin Dongjiang Port Rui Hai International Logistics Co. are in police custody, according to the official Xinhua News Agency. All investigators have said publicly so far is that the giant explosions, which killed 50 people, were started by a fire.
Tianjin, home to the world’s 10th-largest container port, is a central part of the government’s push to develop the area around Beijing, 120 kilometers (75 miles) away. The blasts raise new questions about the speed of the buildout there — and across China — after three decades of breakneck economic growth.
The incident is “a kind of by-product of China’s too-rapid development,” said Hu Xingdou, an economics professor at the School of Humanities and Social Sciences at Beijing Institute of Technology. While the cause of the blasts aren’t yet known, “poor urban planning and lax management of dangerous chemicals also led to this incident,” Hu said.
The port city of more than 15 million people has become a gateway to northern China for shipments of metal ore, coal, automobiles and crude oil, and is home to manufacturing operations for companies including Deere & Co. and Caterpillar Inc. Deere said it temporarily suspended Tianjin operations.
The two blasts late Wednesday night shattered windows in buildings for kilometers around and disrupted operations at the port. The death toll included 17 firefighters, Xinhua reported. A total of 701 people were hospitalized, including more than 70 with critical injuries, it said.
The blaze has been brought “under initial control,” Xinhua said Thursday afternoon, citing the Ministry of Public Security.
A team of 217 military specialists in nuclear and biochemical materials has arrived in the city, Xinhua said, citing People’s Liberation Army officials.
Industrial accidents are rife in China. Last year a fireball ripped through a factory in Kunshan that finishes vehicle rims, killing at least 75 workers and injuring 185. That came after a crude-oil pipeline leak and blast killed 55 people in Qingdao.
“Loose links in public oversight and inadequate punishment are to blame for constant incidents in China,” said Lin Boqiang, a director of the Energy Economics Research Center at Xiamen University. “If a chemical accident like this happens in the U.S., the company responsible will go bankrupt overnight with overwhelming government fines and civil suits. Yet in China we don’t always hear about aftermath punishment for responsible parties.”
The first explosion occurred at about 11:30 p.m. Wednesday, 40 minutes after a caller reported a fire had broken out at a logistics facility holding hazardous chemicals, the Ministry of Public Security said on its microblog.
China’s earthquake center said the biggest explosion was equivalent to a 2.9-magnitude temblor.
Video footage showed giant fireballs rising into the air, towering over nearby buildings. The initial blast was followed by a mushroom cloud of smoke, generating an impact so intense it smashed windows of surrounding buildings and torched hundreds of vehicles stored nearby.
Makeshift building structures were leveled and stacks of shipping containers collapsed on vehicles parked nearby, according to pictures that the official People’s Daily posted on its Weibo account.
As of 11:22 a.m. Thursday, oil tankers and vessels carrying “hazardous products” were still barred from calling at Tianjin port, and vessels weren’t being fully allowed into the northern part of the port near where the blast hit, the Tianjin Maritime Safety Administration said.
BHP Billiton Ltd. said its iron ore shipments were disrupted by the explosions, although discharging berths weren’t damaged. Volkswagen said its imported cars were damaged, while Renault SA said the explosions badly damaged about 1,500 of its cars worth $33 million.
Tianjin Port Co. closed down 2.1 percent at 13.73 yuan in Shanghai trading Thursday. The port operator said it was evaluating losses from the blast and that operations were proceeding as normal.
Tianjin Port Development Holdings Ltd. said in a statement to the Hong Kong stock exchange that it’s assessing the damage but doesn’t expect to suffer a material loss from the accident. Shares of the company, suspended Thursday, are due to resume trading Friday.
–With assistance from Keith Zhai and Xin Zhou in Beijing, Jing Yang in Shanghai and Kyunghee Park in Singapore.
©2015 Bloomberg News
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