Typhoon Haima Hits China as Weaker Storm; AIR Worldwide Comments

By Dominic Lau and Eduard Gismatullin | October 21, 2016

Typhoon Haima made landfall in China after it brushed past Hong Kong, forcing the city’s stock exchange to cancel trading for the day and airlines to suspend flights.

The Hong Kong Observatory said it will consider lowering Storm Signal No. 8, its third-highest warning, to No. 3 between 5 p.m. and 7 p.m. local time. The weather service warned of “widespread heavy rain in a few hours” for the financial center. As of 4 p.m., Typhoon Haima was centered about 140 kilometers (87 miles) northeast of Hong Kong, after making landfall in the vicinity of Shanwei of the Guangdong province.

Hong Kong Exchanges & Clearing Ltd. scrapped trading as signal No. 8 was in force after noon. Authorities shut schools, and most of the city’s ferry and bus services have been suspended. Trains continue to operate with an adjusted schedule, MTR Corp. said.

It’s the second time this year the Hong Kong markets have closed because of weather disruption. Business was halted on Aug. 2 when Typhoon Nida hit the city. Some brokerages have contingency plans to ensure they can trade other Asia Pacific markets from Hong Kong, working from home or staying in hotels close to their offices. Some headed to the office by trains and taxis on Friday.

“We are all in the office and business as usual trading all regional market,” said Rafi Mohideen, the Hong Kong-based head of Asian trading at Instinet Pacific Services Ltd, a unit of Nomura Holdings Inc. “We are a regionalized trading desk, but if it gets worse we have other regional offices that can help.”

Fallen Trees

Typhoon Haima has done limited damage in Hong Kong so far as the tropical cyclone weakened overnight before edging toward the coast of Guangdong. It earlier killed at least eight people in Philippines, with more than 90,000 evacuated, as the strongest typhoon to hit the country this year.

Hong Kong government received 156 reports of fallen trees and no flooding or landslide reports. One fallen tree partially blocked a highway in Causeway Bay, and another fell onto a passenger car in Sai Kung, according to Hong Kong Cable Television. Scaffolding was seen hanging from a side of a building in Tsuen Wan. A few were swimming at a beach in the morning despite the Observatory’s call to stay away from the sea.

About 170 people took refuge at the 22 government-run temporary shelters. Twelve people have sought medical treatment at public hospitals, the Hospital Authority said.

The Hong Kong Airport Authority said a total of 742 passenger flights have been canceled or delayed as of 2 p.m. Cathay Pacific Airways Ltd. and its Dragonair unit said flights from 11 a.m. to 10 p.m. would be “significantly disrupted.” Hong Kong Airlines suspended all flights before 10 p.m.

–With assistance from Belinda Cao, Suzy Waite, Brendan Scott and Jasmine Wang.

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[Editor’s note: While the Philippines has had to deal with the effects of Typhoon Haima’s Category 4-equivalent landfall, southeastern China and Hong Kong have had to prepare for Haima’s second landfall as a weaker Category 1 equivalent storm on Oct. 21, 2016, local time, according to Boston-based catastrophe modeling firm AIR Worldwide.

In coastal regions of southeastern China, houses are typically of confined masonry or reinforced concrete construction with clay tile roofs, which perform reasonably well in the face of Category 1-equivalent winds, said AIR Worldwide.

By contrast, urban apartment buildings tend to be mid- or high-rise structures of confined masonry and reinforced concrete construction, respectively, many of which have commercial establishments on the ground floor. AIR Worldwide said that such better-engineered apartment buildings are common and tend to fare well in Category 1 winds, “although minor nonstructural damage – especially to roofs and wall claddings – is possible.”

Generally, commercial and industrial buildings are more resistant to wind and water damage than residential buildings, AIR said.

With high population density along the southeast coast of China, many homes and businesses are at risk from flooding, the AIR statement continued.

While Hong Kong is home to more than 7 million people, its mountainous coastline and strongly enforced building codes lessen wind vulnerability, when compared to other coastal areas in the South China Sea, AIR Worldwide said.

“Its heavy investment in a flood defense system keeps inland flood risk within the city relatively low, although flooding is common in the surrounding areas and particularly in the mountainous regions. The reclamation of land is increasing storm surge vulnerability in the region due to exposure proximity to sea level and the narrowing of Victoria Harbour.”

According to AIR, most of the single-family houses in Hong Kong are made of reinforced masonry or concrete. “Condominiums, commercial, and industrial buildings – often mid- or high-rise structures – are mainly of reinforced concrete or steel construction, reducing wind vulnerability. However, many high-rise buildings have basements where service equipment is located; such equipment is expensive and vulnerable to water.”

Residential insurance take-up rates in China are low, while commercial take-up rates vary by province, AIR said, noting that insurance take-up rates in Hong Kong are high for both residential and commercial buildings. Take-up rates for building contents are higher for commercial and lower for residential lines, the modeling company continued.

According to AIR, weak-wind typhoons that affect vast areas and generate significant rainfall have often contributed more to insured typhoon losses in China than landfalling storms with high winds.]

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