Taipei Times: After devastating the nation's service sector, how has the SARS epidemic impacted the nation's manufacturing sector and cross-strait trade?
Preston Chen (
However, the disease's negative impact on the manufacturing sector should be limited if the disease can be successfully contained around June 20 as the government now expects. Medium and long-term investment projects were once put off, yet haven't been called off. It's hard for the disease to alter the fate of the manufacturing sector's investment projects since they are market-oriented and long-term. Its impact may drag on to affect the nation's economic performance in the third quarter and this year's GDP since some international buyers have shifted their orders to other Asian countries and uncertainties may arise to invalidate business contracts. But I think, overall, the economy may gradually recover in the fourth quarter.
TT: Do you think China's mis-management and concealment of the SARS outbreak would scare away future investment projects, considering the risk of doing business in China has increased?
Chen: No, I don't think so. The major reason behind China-bound investments is its coveted markets, which most businesses find no alternative to except to enter and compete for. Only a small percentage of businesses, which are not heavily relying on China's markets, may consider pulling the plug in China following the SARS outbreak there.
Besides, the disease knows no borders and set its foot elsewhere including here. The disease ushered in a "biochemical era" that showed the world it is facing more and more invisible [viral] enemies. We have learned that, after humans sabotaged the ecological balance, many viruses, which used to co-exist with people, have turned detrimental to humans. The upside of SARS is that people begin to place higher importance on personal hygiene and public health.
TT: The government has offered over NT$20 billion to help bail out SARS-affected businesses, including the service sector. Is that good enough?
Chen: The service sector has been the hardest-hit by SARS and is in desperate need of financial support. While the manufacturing sector may not have been hit as badly as the service sector, some have suffered slow business or curtailed orders and that will mean difficulty in repaying loans. We would like to urge banks to give SARS-hit busi-nesses a break and not to cut back their capital supply. They should be able to survive the disease and get back on their own feet again as orders pick up. Fortunately, some banks have agreed to offer loan rollovers, which is good news.
Moreover, I would like to suggest that the government come up with relief measures that allow SARS-hit businesses to claim tax deductions in accordance with their losses. Ironically, some manufacturers, such as surgical mask makers benefited from the outbreak since their sales skyrocketed.
TT: What about your company? Ho Tung Petrochemical Ltd (
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