A good start is half of success. This is especially true for the Chinese economy this year. During the first quarter, a series of positive data help relieve people’s worries to some extent about a gloomy economic picture in the shadow of SARS.
For the past few years, China has been running quite fast on a smooth track of economic development. But how about this year when an unexpected attack of SARS has swept across the country and shattered many sectors of the national economy? Many people are deeply worried about a downturn triggered by this epidemic, while many others show their confidence and optimism about the endurance and flexibility of the Chinese economy. The economic facts and figures help us see the real picture.
Some experts point out that the impact of SARS cannot be fully understood till a few months after the current SARS crisis is over. That means the second quarter of this year will show more clearly what kind of aftermath will likely unfold in China. They also suggest that efforts should be reinforced in many fields during the coming months to offset the blow of SARS.
SARS struck its heaviest blow to China in April this year. Therefore some professional organizations lowered their expectations about the Chinese economy. However, the economic performance during the first quarter turns out to have been robust.
Statistics show that the GDP grew by a surprising 9.9 percent in the first quarter. More specifically in April hit hard by SARS, the industrial enterprises of scale achieved a value-added of 319.7 billion Yuan, an increase of 14.9 percent in comparison to last April. State-owned and other types of fixed assets investment, excluding the township and individual investment, reached 278.6 billion Yuan, up by 28.9 percent. The total trade volume set a monthly record and rose by 33.8 percent to 70.2 billion US dollars. And the one billion US dollar of trade surplus made up for the trade deficit appearing in January of this year. Due to the stagnancy of the food industry resulting from SARS, the consumer sales volume decreased by 1.6 percent from March, to 340.7 billion Yuan.
The tourist industry and transportation sectors bore the brunt of the SARS strike. But thanks to their limited shares in the overall economy, the negative impact is not so significant.
“The temporary slowdown of the Chinese economic growth helps store energy for future rebound. One simple instance is that, if you don’t come out of home today, the volume of your consumption drops. But your family savings increase. Once the SARS situation comes to an end, your desire for consumption will go up. When the threats of SARS are removed, it will be likely that the people choose to travel to Singapore, Malaysia, Thailand, Australia, South Africa, and any other place suitable for travel,” said An Xingben, scholar.
Some major infrastructure projects were almost unaffected by the SARS crisis. For instance, the Jingdian-Shanghai section of the gas transmission project from the western region to the east of the country was finished on May 5. Tens of thousands of workers are racing against time in order to achieve commercial gas transmission to Shanghai by January 1 of 2004.
As the external business environment keeps improving, some large scale state-owned enterprises such as the three major petroleum corporations in China remain on an upward trend in their operations. During the first four months of this year, both the Sinopec Group and the China National Offshore Oil Corporation achieved sharp increases in their turnovers and profits. The PetroChina Corporation also made noteworthy progress in their exploitation of raw oil and natural gas.
Right after the outbreak of SARS, China Ocean Shipping Company initiated its safe emergency management system, ensuring zero infection of its staff working around the world. Nearly 44 percent of its planned annual growth has been realized during the first quarter.
The building industry in China is undergoing a boom period and continues to grow at a high rate. Many construction sites are seen running in high gear despite the SARS crisis. In addition, a few leading construction corporations in China devoted themselves directly to some anti-SARS projects, including the establishment of the Beijing Xiaotangshan Infection Hospital.
In Shanghai, the commercial center of China, the total foreign investment volume during the past four months took a leap of 51 percent, reaching 43.09 billion US dollars. In April alone, 520 foreign projects got authorizations from the municipal government. Recently, 15 multinational corporations which have set up branches in Shanghai called for hand-in-hand actions in the battle against SARS. And that turns out to be an encouragement for the Chinese government and people.
The General Motors Shanghai factory has taken necessary measures to keep its employees working in a safe environment. New models of cars will come off the lines in July this year as planned.
In addition to keeping normal operations, Kodak Corporation also donated optical and imaging equipment to the forefront of the anti-SARS battle.
It is worth noting that most of the foreign enterprises doing business in China have stayed away from the panic caused by SARS. They insist on the principles of not withdrawing capital, not leaving China and not suspending operations and have offered much support to China’s anti-SARS campaign. One of the reasons is that they attach great importance to the huge Chinese market, which is abundant with business potentials. Furthermore, they have worked out some effective countermeasures to reduce the risks posed by SARS. A majority of the high level officials of these multinational corporations believes that the SARS crisis in China is just temporary. They are confident that it can be overcome through the joint efforts and collaboration of both Chinese people and foreigners working and living in China.
The economic data at hand can ease people’s anxiety to some extent. But we can’t afford to ignore the rippling effects caused by the SARS crisis. We have to wait and see whether the negative impact on some economic sectors will be so severe that Chinese economy has to face a slowdown.
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