Posted on 04/21/2003 1:22:40 AM PDT by flamefront
BEIJING, April 21 (Reuters) - Vacation plans are scrapped, shopping malls are nearly deserted and restaurant staff wait nervously to serve diners who never show up.
China's admission that the SARS virus is far more widespread than previously acknowledged is taking the shine off an economy that has been the envy of the region, analysts said on Monday.
On Sunday, the government said the number of cases of Severe Acute Respiratory Syndrome cases in Beijing was almost 10 times higher than previously reported. The government sacked Health Minister Zhang Wenkang and Beijing Mayor Meng Xuenong.
Nearly 80 people are known to have died in China and more than 1,800 infections have been reported, accounting for nearly half the world total.
Many economists say it is too early to give specific estimates of the ecomomic toll, but the impact of SARS on daily activity in Beijing is evident.
"Normally the road to the market is so jammed with cars you can't even get through," said Chen Li, a Beijing musician who lives near a major antique and furniture market.
"These past few days it has been empty and even bicycles are few and far between," Chen said.
GROWTH SEEN SLOWING
Sparkling upscale shopping malls with their marble tiles have been turned into virtual echo chambers as customers, fearful of contracting the potentially deadly virus, opt to delay purchases.
Meanwhile, turnips, garlic, bleach and face masks have become hot commodities as people scramble to stock up on items said to guard against SARS.
China also cancelled the week-long May Day national holiday, known as "Golden Week" for its booster effect on tourism and consumer spending, dealing a blow to travel agencies and hotels.
"So far we are still looking at the impact on GDP coming from reduced demand for services," said Yiping Huang, an Asia-Pacific economist with Salomon Smith Barney in Hong Kong.
China seems in little danger of missing its official growth target of seven percent for the full year, but the outbreak all but ensures the second quarter won't match the stunning 9.9 percent growth during the year to the first quarter.
Huang said he had lowered his forecast for the rise in full-year gross domestic product to 7.3 percent from 7.6 percent.
That could come down further if China fails to contain SARS, leading to factory closures or a reduction in foreign investment, which has been a key economic driver, Huang said.
"There are other implications we will assess later on, like the impact on the supply of manufactured goods or whether they will start to close down factories," Huang said. "These are certainly areas we are keeping an eye on."
Economists have also said they would watch for the impact on a giant twice-yearly trade fair currently being held in Guangdong, the booming southern province where SARS is believed to have originated. Officials have not given attendance figures, but anecdotal evidence suggests participation in the fair, especially by foreign businesses, is down dramatically.
NOT LIKE HONG KONG, YET
Analysts said China has a few things in its favour to help it weather the spread of SARS.
Its population of 1.3 billion means the proportion of those with the disease is very low. Tourism makes up only a few percent of the economy. And the country's vast size means SARS will spread more slowly than in regions like Hong Kong.
Last week, the State Statistical Bureau said SARS would hit the economy later this year, but estimated the impact would be modest and largley limited to tourism, retailing and catering.
"This is definitely a negative for local consumption, but I reiterate the point that it's not anything like what we're seeing in Hong Kong and Singapore," said Paul Cairns, an analyst with IDEALglobal in Singapore.
"The risk is that the disease continues to spread, so if we start talking many thousands of people infected, and the widespread panic like we've seen in Hong Kong, then we'll see more of an impact," Cairns said.
This will affect the economy of the U.S. even if SARS doesn't become a problem here. Think of all those Chinese imports that won't reach our shores if their workers are sick or dead.
This is some of the worst "analysis" I have seen outside of the Clinton administration.
Population size per se means only that it would take a few weeks or months for a geometric progression to take its toll.
The number of those infected is much higher that the official numbers -- how much higher? The Chinese Government may know but these analysts are probably clueless. In any event the number of infected and their contacts to date is probably too high to effectively enforce a quarantine.
Tourists aren't the only people that travel.
Size and geographic isolation may result in isolated pools available to reinfect the whole as well as perhaps insulating some populations from the disease.
In addition, the "analysts" overlook the fact that Hong Kong's health care system, sanitation, level of education and overall infrastructure make it much better equiped to handle an epidemic.
Hong Kong is densely populated, but the rest of China has huge urbanized pockets that are dense enough to present all the same challenges as Hong Kong in this respect. I would rate this as locally significant, but not a mitigating factor for China as a whole.
Unless I am missing the point this is a very lame bit of spin.
This disease is starting to scare me.
There is no vaccine, and none expected for some time. But even a vaccine may likely be ineffective for the mutations of the SARS virus. Immune systems apparently have no response for this completely new virus. Even testing for the virus has apparently only been developed in the last day. This because the decoding of the virus's DNA happened very quickly only last week.
It'll take a much larger epidemic to punch a hole in China's 700-million strong working-age population. Their supply of cheap labor is almost literally endless. On top of that there's already way too much manufacturing established in southern China for foreign companies to readily relocate. Whatever's in China is likely to stay there. It's the new investment that's still on the drawing board that might be reconsidered.
What does make sense is that
The biggest contribution to the spread of novel diseases is made by China's 94 million migrant workers who hail from the countryside and seek work in places like Beijing and Guangzhou.
And that the under-reported infections are much greater than anyone is daring to even estimate for fear of inciting panic while so many unknown still surround this disease.
How many times have we repeated to ourselves that there's no true cure for the common cold, only treatment for its symptoms?
Apparently SARS is a lethal version of the common cold. I've got a feeling that it'll eventually lead to a comprehensive overhaul of every healthcare system in the world.
The Chinese elites generally have little concern whatsoever for the common citizenry. Since there's so many of them, the rulers act as if they're running an ant colony, where the individual is an expendable commodity. There's little to surprise people in the Chinese government's behavior. The difference today is that they can't hide the truth in such an intertwined world, so they'll have to adapt or die. SARS is definitely the biggest crisis for China since Tiananmen.
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