To counter the unexpected disaster caused by SARS,
the Chinese Government has decided to attach equal
importance to epidemic prevention and control and economic
development.
The sudden outbreak of SARS
has in fact hindered China's economic progress. To maintain
the sustained, rapid and sound development of the national
economy, the Chinese Government has worked out effective
counter-measures on the basis of sufficient estimation of
various difficulties and negative influences, and pledged to
ensure all its work related to reform, development and
stability proceed smoothly. The SARS
epidemic has adversely affected China's tourism, catering,
recreational, retail, aviation, exhibition and other service
industries, as well as related business sectors. Many
analysts worry that if the epidemic keeps spreading, trade
and domestic and foreign investment will be affected, which
may lead to chain reactions of economic austerity and break
China's new economic expansion cycle.
The outbreak of SARS is indeed a disaster. But
people have no reason to be overanxious, panic-stricken and
pessimistic about China's economic development. In fact,
over the past 20-odd years of reform and opening-up, China
has suffered many setbacks, including political turbulence,
drastic economic fluctuation, the Asian financial crisis and
catastrophic flooding. However, the country, always
persisting in taking economic construction as the central
link, has overcome these temporary difficulties one by one
and continued to forge ahead along its set path.
In the short run, some industries, hit
by SARS, will entail some losses. However, China, as a large
country with a tremendous market, is not confined to a
region or dependent on certain industries economically. The
country possesses an economic development web and a plural
industrial structure, which enhances its capacity to resist
crisis. Though the negative influences of SARS will slow
down China's economic growth, they will be offset by many
positive factors. This will enable the country's economic
development to maintain a good momentum. Some people worry
that China's foreign trade and investment may decline.
Although the country's US$600-billion import and export
volume makes up a considerable part of the GDP, the net
export volume, standing at hundreds of billions of yuan,
accounts for only 2-3 percent of the GDP. Hence, the impact
on foreign trade and investment is not decisive. The key
lies in expanding domestic demand. So long as China's
domestic production maintains steady and sustained growth,
domestic purchasing power will not plummet drastically.
Furthermore, as the Chinese economy is partially overheated,
the sudden attack of SARS may help readjust and cool down
sectors that are excessively expanded.
In the long run, China has entered a new cycle of
economic development, with the formation of an economic
growth mechanism driven by market forces. The 16th CPC
Central Committee laid down the grand goal of building a
well-off society in an all-round way. China must seize the
current strategic opportunity and stick to the central task
of economic construction. The attack of SARS on China's
economy comes from outside. As it is not a problem arising
from the economic structure itself, it will not cause
economic crisis or change the country's mode of economic
growth, nor will it change the following characteristics of
China's economic performance:
First, compared with mature economies, China's
comprehensive competitive advantages, such as low-cost
labor, universalized education, complete manufacturing and
processing industrial setups and a unified domestic market
with a tremendous potential, will continue to exist and grow
further.
Second, China's high savings
deposit rate sustains capital supply and a potential
consumption capacity. Third, the
investment and consumption enthusiasm spurred by
industrialization, urbanization and modernization is
stimulating China's economic growth. Motor vehicles,
housing, telecommunication products and a batch of emerging
industries have become the country's new economic growth
points.
Fourth, guided by the
government's macro-control policy, non-public investment has
increased vigorously, forming a great demand for investment.
Meanwhile, the reform of state-owned assets has created
enormous market opportunities for domestic and overseas
investors.
Fifth, following the
quickened process of economic globalization and attracted by
China's rapid economic growth, many transnational companies
have linked their long-term development strategies with
China's economic development. SARS, as a sudden disaster,
will not change investors' expectations of the Chinese
market. Moreover, economic globalization cannot be separated
from China's economy. Any attempt to cut economic ties with
China will harm both sides. Last year, global trade volume
grew by only 2.7 percent. China's import and export trade,
however, registered a two-digit increase.
In a word,
outside attack will only temporarily affect China's economic
growth, investment and consumption. After the epidemic is
curbed, China's economic activities will return to normal
and may make even further progress. The temporary decline in
GDP is not fatal. China's tremendous potential of economic
development backs the Chinese people's confidence in
defeating SARS.
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