Ravaged by SARS:

The Case of Hong Kong

Cumulative Number of SARS Cases in Hong Kong

(as of Sept 11, 2003)

Infected Dead

Overall 1,755 299

Medical Staff 386 6

Community 1,369 293

Of which: Amoy Gardens 321 >40

Daily New Number of SARS Cases (up to June 11, 2003)

Source: HKSAR Government press releases.

0

20

40

60

80

100

3/11 3/25 4/8 4/22 5/6 5/20 6/3

Date

Persons

Community

Amoy Gardens

Medical Staff

Daily New Number of SARS Cases – Medical Staff (up to June 11, 2003)

Source: HKSAR Government press releases.

0

5

10

15

20

25

30

3/11 3/25 4/8 4/22 5/6 5/20 6/3

Date

Persons

Daily New Number of SARS Cases – Community Excl. Amoy Gardens (up to June 11,

2003)

Source: HKSAR Government press releases.

0

10

20

30

40

3/11 3/25 4/8 4/22 5/6 5/20 6/3

Date

Persons

Suspension of classes

Quarantine – contacts of confirmed patients

Quarantine – contacts of suspected patients

Daily New Number of SARS Cases – Amoy Gardens (up to June 11, 2003)

Source: HKSAR Government press releases.

0

10

20

30

40

50

60

70

3/11 3/25 4/8 4/22 5/6 5/20 6/3

Date

Persons

Residents of Block E were being moved into holiday villages

Cumulative Number of SARS Cases in Hong Kong (as of Sept 11, 2003)

All deaths

With chronic disease history

No chronic disease history

Overall 299 201 98

Male 168 108 60

Female 129 91 38

Unknown 2 2 0

Aged 0-64 108 43 65

Aged 65+ 191 158 33

Total Mortality Rate due to SARS (up to June 11, 2003)

Source: HKSAR Government press releases.

16.6%

17.5%

0%

5%

10%

15%

20%

25%

30%

3/11 3/25 4/8 4/22 5/6 5/20 6/3Date

Mor

tali

ty R

ate

(%)

Mortality Rate among All cases

Mortality Rate among Discharged & Deaths

Total Mortality Rate due to SARS by Age Groups (as on Sept 1, 2003)

Source: Clinical Trials Centre, The University of Hong Kong

70.3

52.5

25.3

13.0

10.0

1.6

0.5

0.0

0 20 40 60 80

0-14

15-24

25-34

35-44

45-54

55-64

65-74

>74

Age

Gro

ups

Age specific Mortality Rate (%)

299 deaths as at 1pm, Sept 1

Assumption: the age distribution of all cases is the same as that reported on Jun 6

Case Fatality Rate by Gender (as on Sept 1, 2003)

Source: Clinical Trials Centre, The University of Hong Kong.

14.113.2

21.9

9.47.7

3.8

0

5

10

15

20

25

Females Males

(%)

All deathsWith Chronic Disease history

No Chronic Disease history

Case Fatality Rate by Age Groups (as on Sept 1, 2003)

Source: Clinical Trials Centre, The University of Hong Kong.

61.9

3.3

17.2

4.19.4

51.2

0.8

10.77.8

0

20

40

60

80

0-44 45-64 >64

Age Groups

(%)

All deathsWith Chronic Disease historyNo Chronic Disease history

SARS came at a bad time

1998 1999 2000 2001 2002

Real GDP Growth -5.0 3.4 10.2 0.6 2.3

Nominal GDP Growth -4.8 -2.6 3.4 -0.7 -0.6

Consumer Price Deflation

2.9 -4.0 -3.8 -1.6 -3.0

Unemployment Rate 5.9 6.3 4.4 6.2 7.2

Property Price Index (Domestic)

117.1 100.0 89.6 78.7 69.8

Budget Deficit (HK$bn) -23.2 10.0 -7.8 -63.3 -61.7

Fiscal Reserves (HK$bn) 434.3 444.3 430.6 372.5 311.4

Economic Fallout

SARS is an exogenous NEGATIVE demand shock to the aggregate demand.

Exports of travel services

Imports of travel services

Investment Consumption Spending

Exports of goods Imports of goods

Output Prices

Unemployment Budget deficit

??

Losses from SARS Large

Initial EstimatesHong Kong Federation of Restaurant and Related Trades

Mid April 50 restaurants closed temporarily

Hong Kong Retail Management Association

Early April Retail sales fell by 50%

Cathay Pacific Airways

Mid April Estimated loss per day is US$3mn; Cancellation of flights rose from 10% in late-March to over 40%

Cinema Association

Mid April Revenue in March dropped by 47%

2002 2003

Q1 Q2 Q3 Q4 Q1 Q2

Private consumption expenditure -0.1 -2.2 -1.2 -1.8 -2.0 -2.2

Government consumption expenditure

2.3 3.0 3.5 0.8 1.3 0.6

Gross domestic fixed capital formation

-11.8 -0.2 -4.3 -0.7 3.5 -5.3

Exports of goods -2.4 5.9 11.5 18.4 19.1 14.3

Imports of goods -4.0 6.0 10.8 18.2 18.8 10.9

Exports of services 6.0 7.7 13.9 18.1 12.6 -14.7

Imports of services -0.7 -3.8 2.0 3.4 -3.9 -19.6

Gross Domestic Product -0.6 0.8 3.4 5.1 4.5 -0.5

GDP at current market prices ($bn) 298 306 325 331 298 288

GDP at 2000 market prices ($bn) 310 318 343 353 324 316

Gross Domestic Product (Year-on-year

percentage changes)

Retail Sales

Year 2003

Total Retail Sales ValueUnit Price

IndexVolume Index

HK$ MnYear-on-year

% changeYear-on-year

% changeYear-on-year

% change

Jan 17,484 9.87 -1.71 11.76

Feb 12,680 -12.56 -1.46 -11.23

Mar 14,171 -6.06 -2.43 -3.73

Apr 12,723 -15.15 -3.28 -12.24

May 13,780 -11.13 -3.95 -7.45

Jun 13,600 -6.46 -3.31 -3.31

Jul 14,602 -2.69 -2.21 -0.49

Unemployment and Under-employment

3-Month Average

Ending On(Year 2003)

Unemployment Under-employment

Person (‘000)

Rate (S.A)

Person (‘000)

Rate

Jan 245.6 7.2 107.8 3.1

Feb 255.9 7.4 101.2 2.9

Mar 259.8 7.5 100.7 2.9

Apr 273.7 7.8 112.7 3.2

May 287.3 8.3 135.0 3.8

Jun 300.0 8.6 151.0 4.3

Jul 309.0 8.7 149.0 4.2

Composite Consumer Price Index

Year 2003 IndexYear-on-year

% change

Jan 93.7 -1.7

Feb 93.5 -2.1

Mar 93.7 -2.1

Apr 93.7 -1.8

May 92.7 -2.5

Jun 92.0 -3.1

Jul 91.1 -4.0

Cross-Border Truck Traffic (Mar 1, 2003 – Sept 8,

2003)

0

5,000

10,000

15,000

3/1 4/1 5/1 6/1 7/1 8/1 9/1

Date

Number of Truck

Inbound

Outbound

Number of Air Passenger Arrival and Departure (Mar 1, 2003 – Jun 30, 2003)

0

10,000

20,000

30,000

40,000

3/1 4/1 5/1 6/1

Date

Persons

Total Arrival

Total Departure

Aircraft Movement at the Hong Kong Airport (Mar 1, 2003 – Aug 31, 2003)

0

100

200

300

400

500

600

700

3/1 4/1 5/1 6/1 7/1 8/1

Date

Number of Aircraft

Hong Kong Visitor Arrivals (2002 August – 2003

July)

1,347 1,292

725

427494

1,408

1,5461,669

1,570

1,5851,501

1,370

0

500

1,000

1,500

2,000

Aug-02 Oct-02 Dec-02 Feb-03 Apr-03 Jun-03

Date

Persons ('000)

Hotel Occupancy Rate (2003 January – 2003

July)

71

34

18

22

798182

0

20

40

60

80

100

Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03

Date

%

Stock Price of Cathay Pacific (Mar 1, 2001 – Jul 31, 2003)

5

7

9

11

13

15

1/3/

01

5/7/

01

8/11

/01

3/14

/02

7/18

/02

11/2

1/02

3/27

/03

7/31

/03

Date

Risk Premium of Hong Kong Dollar (Mar 1, 2002 – Jul 31, 2003)

-50

0

50

100

150

200

250

300

350

400

3/1/

02

5/1/

02

7/1/

02

9/1/

02

11/1

/02

1/1/

03

3/1/

03

5/1/

03

7/1/

03

Date

Pips

Note: Risk Premium = (1-Year Forward – Spot) 10,000Source: Datastream.

Stock Market Indices

IndexMar 12-Mar 31

Mar 12-Apr

30

Mar 12-May 30

Mar 12-Jun

30

Mar 12-Jul 31

Hong Kong: Hang Seng Index

-2.71% -1.78% 6.90% 7.91% 14.20%

Hong Kong: HS Finance

-2.63% 0.95% 9.51% 8.91% 12.90%

Hong Kong: HS Utility

0.15% -1.27% 2.15% 2.51% 2.93%

Hong Kong: HS Property

-4.68% -6.47% 2.50% 2.50% 14.88%

Hong Kong: HS Commercial and Industrial

-2.77% -3.31% 6.46% 9.69% 17.95%

China: Shanghai A 2.45% 3.25% 7.02% 0.90% 0.26%

HK$ 11.8b Relief Measures

Salaries tax rebate: 2.3b

Concessions on rents, rates, water and

other charges for a quarter

Temporary jobs and temporary training

for unemployed workers: 430m

Loan guarantee fund: 3.5b

Disease control: 1.5b

Revival: 1b

Other Relief Packages

On April 25, the Airport Authority offered a relief package worth HK$ 363m to airlines, retailers, caterers and franchisees badly hurt by SARS:

$100m worth of reductions for some

charges

$263m worth of interest free deferred

payments

Contingent Measures

On May 25, less than 48 hours after the WHO lifted its travel advisory on Hong Kong, the Airport Authority announced a multi-million dollar revitalization package:

Airlines reinstating cancelled flights would enjoy a discount on landing charge, depending on load factor:

Load Factor Discount on landing charge

Below 20% 50%

21%-40% 25%

41%-60% 10%

Contingent Measures

For existing flights, more passengers carried (i.e. higher load factor) would result in higher discount in landing charge, also up to 50%.

For example, a 10-percentage point increase in load factor will result in 10% discount on landing charge.

Main Lessons

Information dissemination

Infection control measures

Environmental hygiene

Cross-border cooperation