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CNN Live Saturday
Interview With Chris Helman
Aired April 26, 2003 - 15:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Canadian businesses are certainly feeling the effects of SARS and they are not the only ones. Growing concerns over the disease could affect billions in global trade. "Forbes" magazine says many companies have disaster plans, but no way of handling economic emergencies from epidemics. Chris Helman with "Forbes" magazine joins us with more from New York. Chris, thanks for being with us. I read in a statement you made that you, in your opinion, terrorism and the war in Iraq have not affected the economy as much as SARS might. Pretty strong words. How do you see that?
CHRIS HELMAN, FORBES: Well, I think that's absolutely true. SARS could be an incredible impact on the global economy. People seem to forget that we have $100 billion a year in trade that we do with China; $60 billion of that trade are goods and services that we import from China. If there's a disruption in that trade, that could have lasting impact on the American economy.
COOPER: But why -- I mean, for someone who is watching this -- why would a disease have impact on trade? Sort of boil it down to the ground level.
HELMAN: Well, the U.S. economy is built on selling goods and services. If retailers suddenly don't have full stocks of all of the electronic devices, the toys, the clothing that comes from China, this could really hurt the retailers. There's also hundreds of businesses that do billions of dollars of trade every year with China. The major insurer, the biggest insurer in the world, AIG, they announced yesterday that they're going to see a shortfall in earnings due to their business in China. They get 28 percent of their revenues from Asia. That could be a major impact if we continue to see the spread of SARS.
COOPER: So just so I understand this, the impact on trade happens because workers get sick, the items are not produced, or is it people in the ports don't want to unload boxes from China? How does it work?
HELMAN: It's all of that. We've seen workers leaving Beijing by the droves. We've seen workers starting to leave Shanghai. If these people don't show up to the factories, don't show up to the docks, that means that goods will not get put on ships and taken across the ocean to the United States. There will be a lag in that effect. There's already ships coming across. It will be probably three or four months before we see any shortage on the shelves, but this is only if the epidemic stays in Asia. If we have an outbreak in the United States, all bets are off. It is estimated to cost the Asian economy something like $50 billion this year to deal with SARS. And that's only with 5,000 cases so far. If we start having a few hundred cases in New York City, that could completely decimate the American economy.
COOPER: And we already know in Toronto, a couple of hundred cases have already hurt tourism a lot there. Canadian officials very worried about that. Chris Helman with "Forbes" magazine, appreciate you joining us today.
HELMAN: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired April 26, 2003 - 15:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Canadian businesses are certainly feeling the effects of SARS and they are not the only ones. Growing concerns over the disease could affect billions in global trade. "Forbes" magazine says many companies have disaster plans, but no way of handling economic emergencies from epidemics. Chris Helman with "Forbes" magazine joins us with more from New York. Chris, thanks for being with us. I read in a statement you made that you, in your opinion, terrorism and the war in Iraq have not affected the economy as much as SARS might. Pretty strong words. How do you see that?
CHRIS HELMAN, FORBES: Well, I think that's absolutely true. SARS could be an incredible impact on the global economy. People seem to forget that we have $100 billion a year in trade that we do with China; $60 billion of that trade are goods and services that we import from China. If there's a disruption in that trade, that could have lasting impact on the American economy.
COOPER: But why -- I mean, for someone who is watching this -- why would a disease have impact on trade? Sort of boil it down to the ground level.
HELMAN: Well, the U.S. economy is built on selling goods and services. If retailers suddenly don't have full stocks of all of the electronic devices, the toys, the clothing that comes from China, this could really hurt the retailers. There's also hundreds of businesses that do billions of dollars of trade every year with China. The major insurer, the biggest insurer in the world, AIG, they announced yesterday that they're going to see a shortfall in earnings due to their business in China. They get 28 percent of their revenues from Asia. That could be a major impact if we continue to see the spread of SARS.
COOPER: So just so I understand this, the impact on trade happens because workers get sick, the items are not produced, or is it people in the ports don't want to unload boxes from China? How does it work?
HELMAN: It's all of that. We've seen workers leaving Beijing by the droves. We've seen workers starting to leave Shanghai. If these people don't show up to the factories, don't show up to the docks, that means that goods will not get put on ships and taken across the ocean to the United States. There will be a lag in that effect. There's already ships coming across. It will be probably three or four months before we see any shortage on the shelves, but this is only if the epidemic stays in Asia. If we have an outbreak in the United States, all bets are off. It is estimated to cost the Asian economy something like $50 billion this year to deal with SARS. And that's only with 5,000 cases so far. If we start having a few hundred cases in New York City, that could completely decimate the American economy.
COOPER: And we already know in Toronto, a couple of hundred cases have already hurt tourism a lot there. Canadian officials very worried about that. Chris Helman with "Forbes" magazine, appreciate you joining us today.
HELMAN: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
