SARS to Have Limited if Any Impact on China's Economic Growth

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Last updated at: (Beijing Time) Wednesday, May 07, 2003

SARS to Have Limited if Any Impact on China's Economic Growth

China's economy will maintain its steady growth momentum despite the SARS' impact to some extent on investment, consumption and exports, according to a number of noted Chinese economists.

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China's economy will maintain its steady growth momentum despite the SARS' impact to some extent on investment, consumption and exports, according to a number of noted Chinese economists.

Though the negative impact of Severe Acute Respiratory Syndrome(SARS) on tourism and transportation cannot be overlooked, Chang Xiuze, a prestigious Chinese economist, prefer to take a more optimistic view of the impact of the epidemic.

Owing to a strong demand related to the fight against SARS, Chang noted, the medical industry, some products of the textile industry (face masks and protective suits), disinfectants and telecommunications have all reported rapid growth during this particular period.

International long-distance calls and broad-band internet service both experienced growth of between 20 and 30 percent in Hong Kong during the month following the SARS outbreak in the city.

The decline in consumption is one of the disease's direct impacts on the economy as fewer people go to department stores, which are often cited as the crowded public places.

However, Zhang Liqun, a prestigious researcher with the Development Research Center of the State Council, acknowledged that consumers' long-term purchase plans won't be influenced by the SARS disease.

After a careful and in-depth survey of several furniture malls,Zhang found that shoppers are buying durable consumer goods in accordance with their purchase plans rather than at random.

With the exception of the drastic rise in the consumption of drugs and disinfectants, the purchase rate of daily necessities aswell as some large consumer goods, including cars, apartments and furniture, will also remain steady, Zhang said.

Though Guangdong province in the south and northern Beijing municipality have been suffering heavily from the disease, Chang Xiuze deems that the epidemic situation is relatively light in theareas serving as China's "economic engines", especially the booming Yangtze Delta area and the region surrounding the Bohai Bay.

Another reason for optimism is the fact that China's vast mid-western regions have controlled the disease, said Chang, adding that their economic support and efforts will remain strong.

Chang also acknowledged that investment from overseas and business activities in the country have been postponed rather thandiscontinued.

Currently, foreign trade operations and commercial visits to China are limited because of the disease, which will in turn affect China's utilization of foreign capital.

Nevertheless, Chang noted, investors will continue to value China's economic prospects, indicating that the impact on the investment environment will be short-term.

Meanwhile, some experts are warning that the negative impact ofSARS will produce some delayed effects at some point in the future.

According to Chang, SARS has mainly affected the service industries, such as tourism, commercial and catering businesses, transportation and recreations, which may, in turn, have impact onChina's industries and agriculture because of the interaction of industrial chains.

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