Bird flu can hardly upset China's good economic situation

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Last updated at: (Beijing Time) Friday, February 06, 2004

Bird flu can hardly upset China's good economic situation

Bird flu, which has attacked a number of provinces in China, only has limited effect on most people's life, a contrast to the widespread panic and economic stagnancy caused by SARS last year.

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The temptation of fried chicken, chicken hamburgers and rice mixed with chicken typically served in Kentucky, McDonald's and Yoshinoya, still seems to be irresistible to many Chinese diners. A mid-aged woman taking her child to eat hamburgers in a fast food restaurant told the reporter that she had learned from the TV that it was very safe to have fried chicken. A salesperson for Yoshinoya found sales of their rice with chicken generally staying at the same level as usual.

Bird flu, which has attacked a number of provinces in China, only has limited effect on most people's life, a contrast to the widespread panic and economic stagnancy caused by SARS last year.

There is no doubt that the mass culling campaign to stem the spread of bird flu has caused considerable losses to China's poultry industry. Chicken counters in some supermarkets are hardly visited by customers. Yet insiders argued that big enterprises with strong anti-risk capacities can reduce possible losses by various measures, for example, selling their exports in the home market, turning out less output, and temporarily keeping their products refrigerated and stocked. For smaller breeding farms, poultry processing plants and households in the industry, compensation offered by the government can help them tide over the hard time.

Similar to the unruffled catering trade, no sign of major disturbances has appeared recently in tourism industry, which had been "used to" epidemics. Another fact worth mentioning is the overall upturn in the long sluggish Chinese stock market due to the recent major lucrative news.

From the overall macroeconomic perspective, unlike some Southeast countries affected by bird flu whose economies depend mainly on tourism and breeding industry, China is enjoying another round of economic growth and its economy is mainly driven by industries which are not disturbed much by bird flu. Experts' estimations show that the adverse impact of SARS on China's GDP growth in 2003 was only 1 percent at the most. Obviously the size of the economic losses brought about by bird flu is not comparable with that by SARS so far.

This is well proved by another fact. Senior executives from Standard & Poor's, a world's famous rating agency, Asian Development Bank (ADB), Citibank and Deutsche Bank all said recently that bird flu would only have very limited impact on Asia's economy including China, unless variation of its virus emerged and spread among humans.

By PD Online staff Li Jia

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