Bird flu to go easy on economy

The new strain of bird flu that has so far killed six people in China will not have a huge long-term impact on the country's economy despite a possible immediate negative effect on the aviation, catering and tourism industries, analysts said Sunday.

"As the government is more experienced in handling emergencies and willing to open up information on bird flu, the situation will be controlled easily," Tang Jianwei, a senior macroeconomic analyst at the Bank of Communications, told the Global Times Sunday.

"Judging from the current development of bird flu, its impact on the economy is not evident. Even in the worst-case scenario, if the situation spirals as seriously as the SARS epidemic in 2003, it would only have limited impact on the second quarter GDP," Tang said.

Tang expected the new bird flu outbreak to have an immediate impact on sectors such as poultry, catering, tourism and aviation.

Tang's view was echoed by several other economists.

"The new strain of bird flu will have some impact on the service sector such as catering and tourism," Yang Weixiao, an analyst with Lianxun Securities, told the Global Times.

"If the bird flu continues to worsen, it will push the GDP in the second quarter down 0.7 or 0.8 percentage points. But the economy will not see a hard landing at the year's end. Pent-up demand may shoot up quickly after the epidemic," Yang said.

Anxiety has been growing in China over the potential effects of the new bird flu virus. The new strain of bird flu has infected 21 people in China, six of whom died.

Shanghai and Nanjing banned all live poultry trading and closed live poultry markets on Saturday.

Fears of a bird flu outbreak also sunk airline shares in New York and Hong Kong Friday. The stock exchanges on the Chinese mainland will resume trading Monday after a break for Tomb-Sweeping Day.

Kong Qinghua, a 65-year-old Beijing resident, said she has already stopped buying chicken and even eggs and would persuade her daughter and son-in-law not to eat in restaurants.

As with SARS in 2003 and other emergencies, concerns over the new bird flu strain pushed up sales of masks, sterilizers and Ban Lan Gen, a traditional Chinese medicine derived from Isatis root.

"Sales of masks and isatis root have doubled over the past few days. Old inventory of Ban Lan Gen was all sold out yesterday," a staff member at a Beijing pharmacy told the Global Times anonymously Sunday.