Economy predicted to grow at 8%
( 2003-07-04 09:26) (China Daily)
China's economy will still grow at 8 per cent this year despite the impact of SARS, according to the latest report released by the Chinese Academy of Social Sciences (CASS).
SARS (severe acute respiratory syndrome) will slow growth in gross domestic product (GDP) by no more than 1 per cent, said CASS economic experts in the analysis of China's post-SARS economic development.
But the experts have lowered targets for this year's GDP growth from 8.6 per cent to 8 per cent.
The report said the influence of SARS on China's social and economic development is more minor than the impact of the Asian financial crisis in 1997. And it will be easier to overcome than the Asian meltdown or the September 11 terrorist attacks in the United States in 2001.
"What SARS really hurt in China's economy were the sectors which were already problematic,'' said Gao Huiqing, an expert with the State Information Centre.
For example, the epidemic cut turnover in parts of the country's service sector by up to 65.1 per cent in May, according to the National Bureau of Statistics.
But the virus did little damage to agricultural and manufacturing sectors, according to Gao.
The CASS report said China's capital investment in fixed assets is expected to grow 14.5 per cent this year, higher than the average growth rate since 1996. The per capita disposable income of China's urban and rural residents will increase by 7.9 per cent and 3.7 per cent respectively.
The analysis predicts that the country's total export volume will exceed import volume by US$10 billion this year.
Gao said he believes the number of export orders and amount of contracted overseas capital coming to China in the third quarter will offset the losses in the second quarter.
However, the CASS report said the pressure caused by SARS on China's employment and finances cannot be ignored.
The spread of SARS made it harder for China to create new jobs, it said.
Statistics show that 24 million new jobs are needed in 2003 in China -- 10 million for labourers in urban areas, 6 million for laid-off workers from State-and collectively-owned enterprises, and 8 million for registered jobless people. At present there are only 10 million new job opportunities available.
To compound the situation, there are another 100 million employable labourers in the countryside.
CASS economists urged the government to save enterprises in difficulty by reducing taxes and fees and adopting other measures, such as offering aid to select industries and enterprises to protect workers' incomes.
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