The Short-Term Impact of SARS on the Chinese Economy

During the peak of the outbreak of severe acute respiratory syndrome (SARS), we conducted a survey in Beijing on 18 April 2003 to determine the economic impact of SARS, in particular its effects on several service sectors in China. The survey indicated that SARS had significant negative impacts on China's economy. The tourism sector was hit the hardest. We estimated that by the end of 2003, China's tourism revenue from foreigners would decrease by about 50-60 percent (amounting to about US$10.8 billion) compared with the tourism revenue in 2002 and revenue from domestic tourists would decrease by around 10 percent (amounting to about US$6.0 billion). Thus, we predicted that the total loss to China's tourism industry would be around US$16.8 billion by the end of 2003. We also concluded that SARS would cause, through a multiplier effect, a total loss of US$25.3 billion to China's economy and that the growth rate of China's GDP in 2003 would be 1-2 percentage points lower than it would have been if the SARS outbreak had not occurred. Copyright (c) 2004 Center for International Development and the Massachusetts Institute of Technology.