"Exports are one of the backbones of Shanghai's economy. SARS has erased many overseas orders and the impact could go wider and deeper in the following months," Han told salespeople who had been to the 93rd Chinese Export Commodities Fair, which was held in Guangzhou last month. "Try your best to go all out to win orders to minimize the negative factor."

Han said the city government believes that Shanghai can fulfill its self-imposed target of US$37 billion in exports this year, in spite of the deadly outbreak.

He also showed confidence in the city's ability to attract US$5 billion in foreign direct investment and US$10.5 billion in contracted funds this year, which is in line with earlier expectations.

But he admitted May and June could see a further dip in the local economy as the manufacturing sector starts to feel the impact of SARS and orders decline.

To offset the negative impact of SARS, Han said the city government would further optimize Shanghai's investment environment by expanding the number of companies that enjoy fast customs clearance and give small, private exporters the same treatment as their state-owned and foreign counterparts.

Han encouraged local exporters to retain their old clients and actively seek new buyers.

"The companies are advised to keep close contact with their old clients, thorough phone calls, e-mails and other modern technologies," Han said. "At the same time, they should seek new clients, try to fulfill the old contracts and try new projects."

He also called for companies' overseas branches to do more work during the period, con-tacting overseas clients and seeking more buyers.

At the Guangzhou fair, 425 Shanghai companies signed deals worth US$41.2 million.

Local exporters have already been working to limit the damage from SARS.

Shanghai Yanghua Import and Export Co Ltd, a private exporter, had just won orders from South Korean manufacturers to export express-mail envelopes to Japan before the SARS outbreak.

But the Japanese buyer wanted to withdraw the order for fear of the respiratory disease.

"One of our vice general managers contacted the Japanese buyer many times and explained to them how the disease is controlled in Shanghai and how qualified the goods are. At last we retained the deal," said Zhu Jiqun, the company's general manager.

The company said it sold 16 to 20 containers of envelopes to Japan starting this month, up from the previously expected four to six containers.

(Shanghai Daily May 20, 2003)