BEIJING: China’s economy grew 9.9% year-on-year in the first quarter 2003, the fastest pace in six years, but the deadly Severe Acute Respiratory Syndrome (SARS) outbreak is casting a pall over future growth prospects.
The eye-popping rise in gross domestic product (GDP) in the first quarter was well above the government target of 7% for the year and put China on pace to beat last year’s 8% performance.
But State Statistical Bureau spokesman Yao Jingyuan said China’s economy still faced many problems and that SARS was certain to dent tourism and other consumption.
“It is certain that SARS will have an impact on the Chinese economy,” Yao told a news conference. “There will definitely be an impact, but the extent of such an impact depends on the timetable of winning the battle against SARS.”
The flu-like SARS has killed at least 65 people and infected more than 1,400 in China since it emerged in the southern province of Guangdong last November.
“There will be an impact on parts of consumption, such as tourism, catering, transportation and hotels. But in terms of overall sales and retail sales, the impact will not be large,” Yao said.
He took a page from communist theorist Karl Marx to explain why foreign investors would not shun China despite the spectre of SARS infection.
“Foreign investment flows from places of low returns to where there are high returns. When we read Marx’s Capital, it says that investors are not even afraid of being hanged or beheaded when profit margins hit 300%,” Yao joked.
Analysts say the economic toll would depend on how long it takes to contain the illness, for which there is currently no known cure. – Reuters