SARS as metaphor: a tale of two epidemics

Rediff - Rajeev Srinivasan: "The Economist says, 'Southern China is a notorious crucible for infection,' noting that a major outbreak of avian influenza originated there in 1997. 'Though it is not certain where the great flu pandemic of 1918 started, many of the lesser flu epidemics that now appear every couple of years are known to originate in China. There are reasons for this: people living cheek by jowl, and in close proximity to pigs and poultry, animals from which this type of virus is thought to jump to humans.'

The Times of India ran a story on 'India one up on SARS hit China' on April 16, as fund managers like Merrill Lynch are downgrading China. The Economist reported also on April 16 ('Not only bad for your health') that the rating agency Standard & Poor's believes the Chinese economy would lose up to 0.5% of its GDP growth this year, and that SARS is affecting East Asia more than the war in Iraq.

Nike has contingency plans to move its production out of China. Motorola has restricted travel to affected areas, while Honda is moving the families of its expatriates out of China. Wal Mart has banned all travel to China. Cathay Pacific has been forced to ground much of its fleet due to rampant cancellations; other Asian airlines are affected. The tourist flow into East Asia, one of the region's major money earners, has been curtailed dramatically. The Canton Trade Fair, usually the single largest trade show in China, is effectively dead this year.

All in all, SARS will affect China badly. I believe the collapse of the Chinese economy will come about exactly the same way. The mandarins, reminiscent of Dutch boys with their fingers in dikes, will try to censor all the bad news. Like the brave 71-year-old Beijing doctor, there will be some brave souls who blow the whistle. But the tsunami of bad debts and fake economic statistics is likely to drown them all. The end for China's Marxists will come with a bang, not with a whimper."