The effects of the outbreak are expected to be greater in the next few months Guangzhou's exports to Hong Kong last month were down 2.4 per cent from March, hurt by the war in Iraq and Sars, state media reported. The city figures are an early indication of the likely impact on Guangdong province of the conflict and the virus The Southern Daily reported Guangzhou's exports in April amounted to US$647 million, while imports were down 8.6 per cent to US$121 million. Guangzhou's exports account for more than 10 per cent of the province's total. A customs statistician said figures received so far indicated that exports for the province would fall slightly from March. 'As a whole it is quite good and within expectations but we still do not have all figures,' she said. Jinan University economics professor Tan Zuoping said the effects of Sars were expected to be greater in the next few months because the psychological toll on workers would affect productivity and disruptions to transport would affect goods shipments. 'The preventive measures that are being taken, such as disinfection of factories and control of movement of factory workers, will have an impact on their morale,' Professor Tan said. Chen Min-chih, the president of the Taiwan Businessmen's Association in Dongguan, said productivity levels had so far remained stable in Taiwan-owned factories. 'We are not allowed to recruit nor to fire workers. In fact, productivity has improved because workers were not allowed to leave their hostels,' he said. Mr Chen was more concerned about the psychological impact on consumers. 'We are worried that exports will slow down because people are avoiding buying products made in affected areas,' he said. A big drop in Guangdong's exports would have serious ramifications for the mainland's economy as the province accounts for a third of its exports. During the China Export Commodities Fair in Guangzhou last month, exporters signed orders worth US$4.42 billion, just a quarter of the US$16.8 billion they booked last spring. Most foreign buyers stayed away for fear of contracting Sars, and exporters feared that their new products would stay on the shelves. Guangdong is hoping to cushion the effect of Sars on its economy with a 900 million yuan (HK$850 million) tax-alleviation package for the worst-affected sectors. The provincial government said it would raise the threshold for business tax from 800 yuan to 2,000 yuan, and allow industries and individuals worst hit by the illness to delay paying their income tax and social security dues.
