Officials and experts are confident that severe acute respiratory syndrome (SARS) will not cause severe damage to the economy of Beijing - even though the epidemic is set to continue for several months.

All economic data for the past four months suggests SARS will not have a great impact on the development of Beijing's economy, said Yu Xiuqin, spokeswoman of the Beijing Municipal Statistics Bureau.

Chinese economist Hu Angang supported the idea that Beijing has a special economic development mode.

He said the annual economic growth rate of Beijing was more than 10 percent for the past five years. This year the rate would be between 12 and 13 percent if there are no negative impacts from SARS.

Although the booming Beijing economy lost growth of half a percent at the end of April, Hu said the impact will become more serious as time passes. It might restrict this year's economic growth rate to around 10 per cent.

"Exactly how much the local economy will be affected by SARS depends on how long it takes the government to bring the epidemic under control," Hu said.

The economic history of many countries suggests an economy is at its most vigorous stage when its per capita gross domestic product (GDP) passes US$3,000, which is exactly where Beijing is right now.

Statistics from the bureau reveal the city saw a 22.9 percent increase in retail turnover during the first four months of this year - by far the highest in the country. "Purchasing power is real, even though it might be withheld for the time being because of SARS," said Hu.

As for the badly hit tertiary industry, Yu said other new growth areas will offset negative impacts.

(Xinhua News Agency May 16, 2003)