Well I never did think SARS was going to be easy, but we still have no idea of the real extent of the problem in China. Toronto is causing a lot of fuss, but I think the ground rules are different. Meanwhile, one day after I stuck my neck out and held out for Chinese growth this year all the data are going the other way. That's what makes being an economist an interesting business, you get the chance to swim against the tide. So I think I'm hanging-on in there, if only to prove to everybody for once that I am not a pessimist. This isn't pure guesswork, its a reasoned assessment of the strength of the growth wave in China and the contra-indications we have seen up to now. All the models in the world are useless in a situation like this. What you have to do is exercise judgement, I sure hope mine turns out to be good.
Shanghai, the Chinese commercial centre that has remained largely insulated from Sars, is expected to report a substantial increase in suspected cases within days, as the virus continues to spread through China. The verdict on Sars in Shanghai, delivered on Friuday by a six-strong World Health Organisation delegation, coincided with a further downgrading of China's growth prospects because of the virus.It came as the disease spread further in the Asia-Pacific region, with the Philippines confirming its first cases. "We already have four documented Sars cases in the country. Three of them came from abroad, while one is of local transmission," Manuel Dayrit, health secretary, said in Manila.Philippine President Gloria Macapagal-Arroyo warned that the government would prosecute people who violated quarantine orders, evaded health checks or falsified medical reports.
Hong Kong was meanwhile investigating a Sars outbreak in a crowded public housing estate that some fear could become a repeat of that at Amoy Gardens, in which more than 300 people were infected in one high-rise tower block. Authorities say there have been six cases from four households in Hing Tung House, a packed apartment complex in Kowloon.In Shanghai, which has reported only two confirmed and 18 possible cases of Sars, the numbers have been so low in comparison to other cities that many suspect a cover-up.However, the WHO officials said the expected increase in cases was the result of a new, broader classification for suspected Sars sufferers, and not deliberate under-reporting by officials.Beijing authorities on Friday raised the official death toll by three to 103 and the number of infections by 103 to 877 - statistics that underlined the city's status as the new focus of an outbreak that has infected more than 4,400 worldwide.
While doctors say the risk to individuals remains small, fear of Sars has gripped the Chinese capital, sending many workers fleeing to their home towns, prompting companies to order impromptu holidays, and emptying hotels, shopping centres and restaurants.Beijing authorities have ordered at least 4,000 people who have had close contact with Sars victims to quarantine themselves at home.WHO officials declined to quantify how many new suspected cases would be reported in Shanghai but it may be as high as 100, a fivefold increase.
J P Morgan further reduced its forecast for annual economic growth in China to 7.4 per cent, down from a revised 8 per cent only two weeks ago, because of lost consumption and lower inventories.Fred Hu, managing director for Goldman Sachs in Hong Kong, said if Sars persisted for longer than the next two quarters, and damaged the key manufacturing sector, it could reduce 2003 GDP growth to 6 per cent. Growth hit 9.9 per cent year-on-year in the first quarter.
Source: Financial Times
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