Hui, article on China and SARS economic/financial impact:
Mystery virus raises economic concerns
By David Bottomley
in Singapore
Financial markets in Asia are coming under pressure as countries there start to feel the economic impact of the mystery virus that is spreading through the region.
Severe Acute Respiratory Syndrome, or SARS, has infected more than 1,600 people worldwide and killed more than sixty, with a majority of cases coming from Asia.
The World Economic Forum says it has postponed its annual China Business Summit, scheduled to be held in Beijing this month, due to fears over the virus.
These concerns have also prompted the cancellation of several other planned events, including concerts by the rock band the Rolling Stones in Beijing and Shanghai.
Immediate effects
The short-term economic impact of SARS is obvious - airlines are cutting flights and hotel reservations are being cancelled as travellers start to heed advice not to go to the worst affected areas like Hong Kong and Singapore.
Shares in Hong Kong's Cathay Pacific fell 7% on Monday and Singapore Airlines shares dropped by 12% over the past week.
Residents there are also staying at home, avoiding crowded shopping malls, restaurants and bars.
Some analysts are already predicting that the outbreak will restrict economic growth in the region.
Future concerns
It is the impact on China though which is perhaps giving the biggest cause for concern.
A strong Chinese economy driven by foreign investment has been helping Asia off-set some of the financial uncertainty stemming from the conflict in Iraq.
But with most SARS cases being found in China, coupled with criticism of the way the government there is handling the problem, the country could start to look less attractive to international investors.
"This SARS episode raises questions about the transparency of local government, in addition to the fact that investors may be afraid to visit their investments," said John Stuermer, an economist at Bear Stearns Investment Company in Singapore.
The long-term economic impact of SARS depends on whether the virus can be brought under control soon but with new cases being reported every day, it is likely that Asia's finance ministers will have to prepare themselves for more bad news.
Story from BBC NEWS:
news.bbc.co.uk
Published: 2003/04/01 09:38:55 |
