By Michael Dorgan

KNIGHT RIDDER

Wednesday, April 30, 2003

(Clearwisdom.net) BEIJING -- The economic costs of SARS in China are growing by billions of dollars, threatening to shake the government of the world's most populous nation if it can't contain the epidemic quickly.

Already an estimated $30 billion has been shaved off the economies of countries affected by SARS because of stalled tourism, less consumer spending and disruption in trade and investment, according to the World Health Organization. China, the epicenter of the epidemic, is likely to bear the brunt of its global impact.

SARS already has cost several Communist Party officials their jobs and has created a crisis of confidence for China's recently installed new generation of leaders, who are under mounting domestic and international pressure to contain the epidemic. Their initial cover-up of the disease's spread has made many Chinese distrust official information on the disease.

That crisis of confidence could quickly evolve into a crisis of governance if Chinese leaders allow SARS to damage the economy. China needs high economic growth to provide new jobs for its growing population and millions of underemployed farmers. The Communist Party, which has a monopoly on power, stakes its legitimacy on the promises of economic growth and development.

"All of the legitimacy of the government is based on economic growth," said Wu Guoguang, a former editorial writer for the government-run People's Daily who's now a professor at the Chinese University of Hong Kong. "If the economy has troubles, everything has troubles."

Far beyond China, even in countries that may escape a major impact from SARS, the epidemic will provoke a reassessment of the risks of globalization, according to Jean-Pierre Cabestan of the French Centre for Research on Contemporary China, in Hong Kong.

The SARS virus, a new strain of the coronavirus group, is believed to have leapt from animals to humans in China's far southern Guangdong province, a hot, humid place where huge numbers of people and animals live cheek-by-snout. Most of the world's influenza viruses are believed to have originated there.

While the proponents of global economic integration have focused public attention on cheap tennis shoes and expanding markets, the threats that can arise from mixing poverty, population density and disease with porous borders and modern transportation have been ignored, according to Cabestan.

"This cocktail is something nobody looked at carefully," he said.

China, now a key player in the world economy, still has vast areas of entrenched poverty, poor hygiene and bad health care. What the SARS epidemic reveals, Cabestan said, is that those problems are no longer China's alone.

"SARS is a sort of environmental disaster," he said. "It shows everybody that they have to be concerned with what is going on in China."

Experts at a SARS conference in Toronto on Wednesday said better diagnostic tests for SARS were needed urgently, because the chest X-rays now used weren't definitive. The experts called for blood and fecal tests and throat swabs.

Beijing's hospitals are some of the best in China, vastly better than the simple clinics in the countryside, where even the most basic care is too expensive for most rural Chinese. Yet Beijing's city government warned Wednesday that its hospitals were becoming overwhelmed by new SARS cases.

"We were ill-prepared in terms of the ability of doctors and nurses, as well as medical equipment and facilities," acting Mayor Wang Qishan said. He added that it was too early to predict when the epidemic would peak in Beijing.

Wang's predecessor was sacked 10 days ago for mishandling the epidemic.

China's government has imposed drastic measures to combat SARS in the nation's capital, which has been paralyzed by a soaring number of cases.

Since April 20, when Beijing officially had only 37 SARS cases, the number had risen to 1,440 as of Wednesday. An additional 1,408 suspected cases in Beijing were certain to push the number of confirmed cases much higher in coming days.

The confirmed cases in Beijing represented nearly half of all reported cases in China, where SARS has been detected in two-thirds of the nation's provinces, municipalities and autonomous regions.

With 159 SARS-related deaths so far, China accounts for nearly half the 353 deaths from the epidemic worldwide. In Beijing, which reported nine more deaths Wednesday, the virus has killed at least 75 people.

Nearly 10,000 others have been quarantined in the capital, where schools, nightclubs, cinemas and many offices have been closed. Many streets are deserted, in part because more than 1 million of the city's 13 million residents are believed to have fled. Millions more are staying at home to avoid exposure to the virus.

In a dramatic show of its resolve, the government this week announced the completion of a 1,000-bed hospital for SARS patients in a suburban district north of Beijing. It was built in eight days by 7,000 workers.

As grim as the SARS crisis is in the capital, other parts of China could fare worse if the sprinkling of cases across the country explodes into a nationwide outbreak. Most provinces are much poorer than Beijing and much less prepared to deal with the epidemic.

Vulnerability has sparked panic in some communities. Last Sunday in the rural town of Chagugang, about a two-hour drive from Beijing, thousands of people rioted after word spread that a local school would be turned into a ward for SARS patients from the nearby city of Tianjin.

On the outskirts of Beijing, farmers have set up roadblocks to try to keep out people who might be infected.

Wang, whose municipality includes a large area beyond the city proper, said stopping the spread of the virus to rural areas was a top priority for the government. He said each village had been ordered to form a unit to fight SARS and that every household had been supplied with thermometers to check for fever, a symptom of the pneumonia-like disease.

If such measures fail and the epidemic continues to spread, the impact on China's economy could be catastrophic, said Mao Yushi, a Beijing economist who operates an independent research center.

"The damage is not necessarily in proportion with the number of cases," he said. "In economic terms, the real loss comes not from the disease itself but from the suspicion among people -- no one knows who is bearing the virus. It prevents people from having contact with each other."

Airlines, hotels, restaurants and other tourism-related businesses have suffered the most so far, but the economic pain will spread and deepen fast if the epidemic isn't checked, Mao warned.

Michael Furst, the executive director of the American Chamber of Commerce in Beijing, said there wasn't much evidence yet of serious impact on U.S. companies beyond "a lot of hand washing and hand wringing."

But he said the impact would be severe if the epidemic wasn't quickly contained.

"If somebody's going to invest money here, at some point they have to come," he said. "And nobody's coming."

http://www.statesman.com/nationworld/content/news/043003/0430sars.html

Posting date: 5/2/2003
Original article date: 5/2/2003
Category: News & Media Reports