May 28, 2003 Economists’ View: SARS only a Temporary Setback to China conomists participating in a Boao Forum for Asia said once SARS is brought under control the economy will regain its footing. The final three months of the year will yield a strong rebound if government measures to check the spread of SARS have succeeded by then. But it is likely the economy will undergo fur- ther setbacks in the second and third quarters. Re- duced demand for services, delays in foreign i vestment, loss of export orders and increased gov- ernment spending on healthcare and support mea- sures will all add to the erosion of growth. (www.qianlong.com, May 15, 2003) China May Overtake Mexico as US Second Largest Trade Partner hould there be no SARS outbreak, or should its impact be contained well, China would be overtaking Mexico as the second largest trading partner of the United States. Mexico’s exports to the US grew 2.6% last year, versus a corresponding 22.4% gain for Chi- nese exports. If that trend continues, at least so in the first quarter of 2003, China would edge Mexico as America’s second major trading partner, after Canada only. (China Radio International, May 9, 2003) Beijing’s FDI Increases 50% in April B jing’s Foreign Direct Investment saw a 50% increase in April over the previous month reaching some US$200 million. Most of the for- eign investment in Beijing is in the tertiary sector, especially wholesale, retail, and entertainment ser- vices. Municipal government data indicate FDI for the first quarter totaled US$600 million, representing a 15% increase over the same period in 2002. The Chinese capital has also witnessed a rapid increase in foreign investment in the manufacture of elec- tronic and communications apparatus as well as the chemical industry. (China Radio International, May 18, 2003) Incomes Continue to Grow ae per capita disposable income of China’s urban residents stood at 2,355 yuan (US$284.76) in the first quarter, up 8.4% from the same period of last year, and that of rural people at 737 yuan (US$89.12), up 7.5%, according to figures released in Beijing on Apr.17 by the National Bureau of Statistics (NBS). From January to March, Chinese city residents spent an average 556.4 yuan (US$67.2) monthly. Spending on telecommunications and public ut ties saw the fastest growth of 20.2% and 18%, re~ spectively. ‘The figures also show that at the end of March, Chinese residents’ bank savings reached 9.4568 trillion yuan (US$1.14 trillion), rising by 253.1 billion yuan (US$30.60 billion) year-on-year. 2003; (www.Xinhuanet.com, April 17, wwwEastday.com, April 30, 2003) China to Achieve Target of 7 % Growth hina’s central bank, the People’s Bank, pre dicts the country can achieve an economic growth of % for 2003. A new report from the bank says China got off to a great start this year, with first quarter growth reaching 9.9%. ee ee ee ee 3Copyright © 2003 EBSCO Publishing