Official Warns of Lagging SARS Impact on China's Economy

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Last updated at: (Beijing Time) Thursday, July 17, 2003

Official Warns of Lagging SARS Impact on China's Economy

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A senior official with the Chinese State Development and Reform Commission said here Thursday that a lagging impact from severe acute respiratory syndrome (SARS) on China's economy should not be neglected, even though the epidemic has been brought under control.

Ma Liqiang, director of the Bureau of Economic Operations underthe commission, told a press conference on China's industrial performance that SARS has exerted more influence on demand than supply, on consumption than investment, on service trades than manufacturing sector, and on small- and medium-sized enterprises than large ones.

According to Ma, tourism suffered most from SARS. In the secondquarter of this year, China lost 84 billion yuan (about 10.15 billion US dollars) in domestic tourism, and 4 billion US dollars from overseas tourists.

Other service sectors, like retail, catering, public transportation and civil aviation, also suffered heavy loss in April and May, said Ma.

Ma said the influence of SARS on China's industrial production and export was also obvious. In May, the growth rates of industrial added value and export volume respectively reduced 1.2 and 2.8 percentage points, compared with April.

Although SARS has been controlled, Ma said, its influence stilllingers. During the second half of the year, especially in the third quarter, many Chinese industries will have limited export orders due to the reduced business activities in the first half.

Others issues, like the pressure on power supply, improper industrial structure and the current flood in the Huaihe River, will all bring difficulties for economic development in the secondhalf of the year, said Ma.

But Ma stressed that SARS could not stymie the fast growth of China's economy, and Chinese industries will still play an important role in supporting the national economy.

Ma expressed his belief that with the joint efforts of the whole country, China has the ability to reach and even break the planned economic goal of this year, with its GDP and industrial performance respectively surging over seven percent and ten percent.

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