Abstract

The effects of SARS (severe acute respiratory syndrome) on trade between the two sides of the Taiwan Strait can be assessed by examining the Chinese market and Taiwan businesses in China.

1. The Chinese economy grew 9.9 percent in the first quarter of this year. That growth had been reported before the SARS outbreak was made public. The epidemic caused retail sales to shrink 20 percent in March, the last month of the quarter. Also severely affected were tourism and restaurant business.
   
   Five out of every ten tour groups have either delayed or canceled trips to Guangdong Province. An official survey shows that the occupancy rate of 20 tourist-class hotels in Guangzhou has dropped 30 percent since April. Five of them cater mainly to foreign business executives, and their occupancy plummeted by 50 percent.
   
   Beijing had to postpone a world economic forum in Beijing. American, Japanese and European multinational companies have banned travel to China by their employees. Their business in China has been affected.
   
   According .to a Beijing University economic research center, the Chinese economy will grow between 6 and 7 percent this year, 1 to 2 percent lower than was previously forecast. That means the SARS epidemic causes a loss of 210 billion in renminpi (Chinese dollar) in gross domestic product.
   
2. Because of difficulties in cross-Strait travel, many Taiwan business executives have stopped visiting their outfits in China. Many American and European buyers have also ceased to visit China to place orders in person. The postponement and cancellation of various exhibitions have led to a decrease in orders.
   
   Taiwan businessmen should be given government encouragement to stage exhibitions in other countries to diversify their market. The government should also consider allowing direct charter flights across the Strait for the benefit of the businessmen.

.....the full text in chinese