From a rational perspective, linking illnesses to the economy is an ill-conceived synergistic paradox. Following the outbreak of each disease, research into the disease produces new medicines and medical equipment. A/H1N1 is a new virus combining swine flu, bird flu and human flu. Once medical researchers make a breakthrough in containing the epidemic, the world's pharmaceutical and medical industries will advance to a new level in terms of checking epidemics. The economic interests driving the advancement could be huge.
Judging from the current situation, the A/H1N1 flu's influence on China is limited. But the country should not relax its vigilance if it is going to maintain 8-percent GDP growth this year. Previously, many economists expected China to be the first to bottom out in the economic recession. To achieve this goal, China must strengthen its economic revival efforts.
The 8-percent GDP growth is a yearly target. But the time span of an influenza outbreak is about three months to half a year. The A/H1N1 flu is now imposing a negative impact on outbound travel, and the number of air travelers has decreased. But the flu's impact will be limited. The Chinese economy will remain safe and sound.
Moreover, mainland stock markets have rallied despite the flu attack, and shares of companies in the pharmaceutical sector have surged the most. Meanwhile, we should notice that the Chinese stimulus package is being carried out forcefully. If the fallout from the A/H1N1 flu deals a heavy blow to foreign economies, China's domestic economic stimulus measures will be further strengthened. The recent reforms in some sectors, for instance, the initiation of a growth enterprise board (a stock exchange for startups), will offset some of the negative external effects on China's economy.
While the A/H1N1 flu has added pressure to our goal of 8-percent GDP growth, the goal will still be attainable if China sticks to its stimulus spirit and readjusts the direction and target of the stimulus plan at an appropriate time. Most recently, the purchasing managers' index climbed during five consecutive months to 53.5 percent in April, signaling that the Chinese economy had hit rock bottom and soon would pick up momentum. |