Lessons From SARS: How The New Bird Flu Could Hit The Chinese Economy
Bank of America's Ting Lu writes that if the new
To get a better sense of what to expect, Lu points us to the impact of SARS in 2003. At the time, SARA caused Chinese GDP growth to fall by 2 percentage points in one quarter, or an annualized 0.5 percent.
"Overall, SARS imposed a sizeable but non-lasting negative shock to the Chinese economy. While SARS hit the economy across the board, it also boosted demand in certain products such as masks and vaccines."
Here's a breakdown of the economic impact of SARS in 2003:
GDP – The SARS virus began in November 2002 and continued until March 2003. GDP growth climbed from 8.1 percent in Q4 2002, to 10.8 percent in Q1 2003, and fell to 7.9 percent in Q2 2003. But in Q3 it climbed to 9.6 percent.
Catering and accommodation sector – This sector took a big hit going from 17 percent YoY in March, to 4 percent in April and -14 percent in May.
Industrial production – In Jan-Feb industrial production stood at 17.5 percent. Many Chinese economic indicators at the start of the year are considered on a Jan-Feb basis because of the New Year holiday. In March this fell to 16.9 percent and continued to decline reaching 13.7 percent in May.
BAML
Home sales – Home sales were barely impacted by SARS but since the property sector has ballooned since then, it could have a more significant impact this time around. Hong Kong's property market was hit hard by SARS.
Financial market – The Shanghai A-share market didn't register a huge impact from the SARS virus, but Hong Kong's market did.
Bottom-line: The biggest impact should be seen on the catering sector, which has already taken a hit as China has cracked down on "gift giving", and the transportation sector.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- An Ambani disruption in OTT: At just ₹1 per day, you can now enjoy ad-free content on JioCinema
- Markets rally for 6th day running on firm Asian peers; Tech Mahindra jumps over 12%
- Sustainable Waste Disposal
- RBI announces auction sale of Govt. securities of ₹32,000 crore
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!