The 7.9 magnitude earthquake, which struck to the northwest of Sichuan's provincial capital Chengdu on Monday, was the worst to hit China in 32 years. It has reduced area buildings to rubble, crumpled roads, disrupted power and communication and, worst, killed an estimated 15,000 people, according to state-owned Xinhua. A further 18,645 are believed buried under rubble in Mianyang, 60 miles from the epicenter.

The country's work safety agency ordered factories, coal mines, chemical plants and gas wells damaged by the quake to suspend operation for safety inspections. "All types of production enterprises affected by the disaster, especially coal mines, chemical plants and gas wells, must immediately suspend production and evacuate staff," the State Work Safety Administration said in a statement on its Web site.

While the scale and impact of the tragedy in human terms cannot be underestimated, and although the full extent of the damage could take weeks or even months to discover, already the financial cost is likely to exceed RMB 140 billion, or US$20 billion, according to disaster modeling firm AIR Worldwide, which uses property and insurance data to estimate the cost of damage from disasters. These estimates cover property losses for residential and commercial/industrial as well as construction all risks (CAR) and erection all risks (EAR) lines of business.

Toyota Motor Corp. and other automakers announced they had temporarily suspended production at factories in Sichuan, according to the Associated Press. Japanese carmakers Isuzu Motors and Suzuki Motor Corp. also stopped production at factories in Sichuan province as a precaution, Kyodo news reported Monday (via Dow Jones), without citing sources.

U.S. automaker Ford Motor Co. briefly halted operations at a vehicle manufacturing plant in the municipality of Chongqing as a safety precaution, a spokesman told Dow Jones. The Chongqing facility is run as part of a joint venture, the Changan Ford Mazda Automobile Co.

Other companies, including Microsoft Corp. and Motorola Inc., reported minor damage to facilities.

Although the Sichuan province is considered a remote region in China, the impact of Monday's earthquake will create an economic ripple effect that underscores the influence China's economy has on the rest of the world.

Japan's economy minister is expecting some disruption to the Japanese economy but is unsure how deep the impact will be.

"The Chinese economy, of course, will be hit first and the effect on the Japanese economy will come after that," Hiroko Ota told AP. "Because we don't know the extent of the damage to the Chinese economy yet, it's hard to tell how much the Japanese economy will be affected."

The Associated Press reports that financial markets in Asia were mostly higher Monday, reflecting relief over the lack of wider damage and signs that China's own markets were taking the disaster in stride.

"Experience shows that inflation or disruption of economic activities caused by natural disasters tends to be negligible and temporary," an economist with JPMorgan Chase Bank in Hong Kong told AP.

Recent editorial from Easier Finance also posits the impact on China's economy will be less ravaging than it could be:

We believe that there will only be a short-term negative impact on stocks that have operations in Sichuan province. To name a few, these include property companies that have upcoming sales in the province, life and property and casualty insurance companies that will see rising claims resulting from the earthquake, expressways companies that might face temporary road closures as well as retail and department stores operators in Sichuan.

On the other hand, it looks like the cost of zinc will continue to rise, according to The Financial Post Trading Desk. Immediately following the quake, zinc prices rose about 5 percent on the London Metal Exchange when it was determined that around 500,000 tons of zinc, or around 11 percent of the country's total, was shut in.

China produces around 27 percent of the world's zinc from mines and 34.5 percent of its refined zinc. Sichuan province, the epicenter of the quake, was the source of 5.5 percent of China's refined zinc production, as well as 10 percent of its lead mine output and 4.1 percent of primary aluminum supply last year, analysts told Thomson Financial.

According to AFP (via Tapei Times) today, the overall impact on the industrial sector looked likely to be limited as the worst-affected region is more dependent on agriculture than manufacturing.

"While the quake caused significant damages to human lives and infrastructure, we expect its impact on China's economic growth to be temporary and limited," a Lehman Brothers economist wrote in a research note.

Meanwhile, post-earthquake reconstruction could pick up significantly, providing a strong boost to the regional economy. The rebuilding demand in the province would benefit certain sectors, such as construction and building materials companies.

"Given that government policy in the past five years has been aiming to accelerate development in the central and western provinces, you probably will see funds mobilized and rebuilding commencing very quickly," Glenn Maguire, chief economist for Asia at Societe Generale, told AFP.