China's economy will still grow by 7.3 percent this year and 7.6
percent next year despite the impact of severe acute respiratory
syndrome (SARS), according to an Asian Development Bank report on
the outlook of regional development in 2003.
Official figures showed that China's economy grew 9.9 percent
year-on-year in the first quarter, the fastest growth for the past
few years. As people worried about the possible impact on certain
economic sectors, investment, the major driving force behind
China's rapid growth, remained intact.
Investment in fixed assets soared nearly 30 percent in the first
quarter as government investment kept growing. Since the government
is to invest 150 billion yuan (18 billion US dollars) in various
projects this year, the growth is expected to maintain the present
momentum over the next few quarters.
At
the same time, non-government investment was picking up. The growth
of investment funding from bank loans, foreign direct investment
(FDI) and corporate financing was two times the growth of
government investment in the first quarter.
In
Guangdong Province, the subject of a World Health Organization
(WHO) travel advisory, the contract value of FDI jumped 57.9
percent in the first quarter, while actual FDI surged 20.9 percent
over the same period of last year.
Beijing and Shanghai, two of the largest cities in China, were also
investing hundreds of billions of yuan in preparations for hosting
the Olympic Games and the World Expo respectively.
Under the government's pro-active fiscal policy and stable monetary
policy, the construction of large-scale government-funded projects
was progressing on schedule.
According to the National Statistics Bureau, SARS had a negative
impact on tourism, hotels and restaurants in Guangdong. However,
the outbreak had so far had no obvious impact on the influx of FDI
and foreign trade of the province.
International analysts said that as soon as the disease was brought
under control, the most affected sectors, such as tourism, catering
and civil aviation, would enjoy great rebound potential.
Last week, Airbus became the first to seize this opportunity inthe
market when it received orders for 30 aircraft from Beijing.
The Chinese government has adopted a clear policy in tackling the
potential risks of SARS. Chinese Premier Wen Jiabao has repeatedly
said the new government would on the one hand strive to win the war
against SARS, and on the other firmly pursue economic development
and push forward reform, opening-up and modernization.
Investor confidence has remained stable. As a result of the
government's effort to fight SARS and the expectation that the
disease had peaked in Asia, the Chinese stock markets stopped
losing ground and stabilized this week. The steadiness will be
reinforced by an extended closure during the May 1 holiday.
On
the other hand, rapid economic growth laid a solid foundation for
China's fight against SARS. Official figures showed no commodities
in short supply. Using adequate reserves of goods such as rice,
flour, oil, meat, salt, sugar, eggs, vegetables and hygiene
products, the government successfully halted panic buying and
maintained market stability.
The rapid growth of fiscal revenue over recent years enabled the
Chinese government to swiftly allocate large amounts of resources
to fight SARS. So far the central treasury had spent 5.52 billion
yuan on disease prevention, treatment and research.
The Chinese government also actively supported and participated in
international cooperation on SARS. The central treasury
appropriated 20 million yuan on scientific research into the cause
and treatment of SARS. The Chinese government also allocated 10
million yuan to set up a special fund for cooperative operations
among the members of the Association of Southeast Asian Nations
(ASEAN).
The Asian Development Bank said in its report that Asian economies
were facing many challenges, including the dimmer outlook of
Western industrialized economies and the impact of SARS. However,
it said the Asian economies would be able to withstand the test
because they had relatively solid bases, generally lower inflation
and abundant foreign exchange reserves.
(Xinhua News Agency April 30, 2003)