Economists agreed Tuesday that China will remain a competitive
player on the international market once severe acute respiratory
syndrome (
SARS)
has been brought under control.
But they accepted that the economy may undergo setbacks in the
short term with the nation's growth rate expected to drop from its
remarkable January-March increase of 9.9 percent in the second and
third quarters.
Experts participating in a seminar in Beijing were optimistic there
will be a rebound in the final three months of the year if
government measures prevent SARS from spreading successfully.
"(Foreign) investment has not been cancelled but only delayed and
investment growth will be higher next year,'' said Andy Xie,
general manager of Morgan Stanley.
"Demand for such commodities as computers and mobile phones is
still there and (consumption) may return (to a high level) in the
fourth quarter.''
The impact of SARS on the Chinese economy is starting to emerge as
a number of industries such as tourism, catering, entertainment and
transportation report a lack of clients as the Chinese try to avoid
traveling and face-to-face contacts. A reduction in foreign direct
investment and trade may also emerge soon.
The Asian Development Bank predicted earlier that gross domestic
products (GDP) in China this year is likely to fall by about 0.2 of
a percentage point to 7.3 percent if SARS lasts for one quarter and
by half a percentage point if the epidemic continues into a second
quarter. Recent research by Peking University suggested the SARS
outbreak on the Chinese mainland would cause an economic loss of
210 billion yuan (US$25 billion) and predicted GDP growth this year
would fall by 1 to 2 percentage points.
But China will remain one of the fastest growing economies in the
world this year, according to Deepak Bhattasali, chief economist of
the World Bank Resident Mission in China, who described the SARS
effect on China's economy as "temporary.''
"The investment environment of Asia, particularly that of China
remains unchanged because of its strong fundamentals,'' echoed Long
Yongtu, secretary-general of the Boao Forum for Asia.
"China still offers the most competitive labor market, and remains
one of the biggest consumer markets and its size is growing
rapidly.''
Lin Yifu, director of the China Economic Research Center under Peking University,
attributed the steadiness of China's economic development to the
fact that the SARS outbreak has not affected China's productivity
and the social structure greatly.
Another renowned Chinese economist, Hu Angang, of Tsinghua University,
based his optimism on the Chinese economy's potential for long-term
growth, its driving force and the stable national macro economy of
the past decade.
Chinese and overseas economists all stressed the importance of
successfully controlling the epidemic quickly in an effort to
maintain the momentum of economic development in China.
"The key to restoring and maintaining confidence of international
investors is to basically win the battle against SARS as soon as
possible,'' said Long.
(China Daily May 14, 2003)