Chinese Officials released last week the widely anticipated - by international observers as well as the country's residents - statistics of China's economic performance during the year's first half.

China's gross domestic product (GDP) growth rate was a reassuring 8.2 per cent, but the severe acute respiratory syndrome (SARS) epidemic scarred the nation's economy, as the figure for the second quarter slipped to a modest 6.7 per cent year-on-year.

That's the lowest growth rate posted by China in 11 years.

People now are concerned that SARS' effects might continue into the year's second half, which would seriously affect the national economy.

To accurately predict what will happen, one needs to analyse which sectors were most affected by the epidemic, which ravaged some Chinese regions from late March to mid-June.

National Bureau of Statistics figures indicate SARS mainly affected six sectors: Tourism, exports, employment, transportation, the consumer market, and sales of farm products.

Of these fields, the last three should quickly recover, as their declines were obviously transient. Customers won't stop shopping permanently because of an epidemic. People must still buy basic necessities. They will eventually purchase the large-ticket items they need.

Transportation of goods and passengers will resume to their normal levels. Actually, they are returning to normal. Trains, shops and restaurants are again crowded, a clear sign of recovery.

It could take some time for tourism to recover, as tourists, whether international or domestic, might have diverted their original budgets to other purposes.

But it is important to remember many potential domestic tourists have used their budgets to buy personal vehicles and/or health-care equipment during the SARS outbreak. Therefore, they contributed to the nation's economic growth, and helped provide the silver lining behind the black clouds.

And people are taking vacations to make up for the SARS down time in nearby tourist attractions.

Exports actually maintained their strong momentum in the first six months. But the adverse effects of SARS will materialize in the year's second half, as a fairly large number of orders were cancelled in April and May.

Unemployment, a chronic problem, was compounded by the SARS outbreak. That is the only, and unfortunately the worst, SARS-related effect that might take a long while to rebound.

Most of the adverse SARS-related consequences can be indemnified. The effects did not exceed the Chinese economy's ability to withstand, and recover from natural disasters.

More important, the backbone of China's economy survived SARS intact.

First, industry maintained its strong growth. It contributed 5.8 percentage points to GDP growth, 0.8 percentage point higher compared with the previous year.

Second, Chinese-produced items are still inexpensive, but good in quality. Also, China's market is vast and attractive, and infrastructure is constantly being improved.

Third, the nation's favourable political and social conditions for economic development have not changed. China continues enjoying political and social stability. The recently installed central administration is committed to maintaining the successful reform and opening-up policy.

Therefore, we are confident China's economy will perform much better in the year's second half. Most of the SARS-affected sectors will rebound - maybe with even stronger momentum.

GDP growth will not only reach the 7-per-cent goal set at the beginning of the year, but might well exceed it.

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