WHEN talking about his business operation in Xintiandi - "Xavier" - over the past two years, Anthony Xavier Edwards, fashion designer and owner, became very excited: "It was extraordinary."

　　But things have suddenly changed last month and "Xavier", like almost all stores, bars and restaurants in Xintiandi and around Shanghai has witnessed its first serious business slump, due to SARS.

　　"About 70 per cent of my clients are foreigners and VIPs who come for international events or travel in Shanghai. But now since many international events have been cancelled, my potential customers are also lost," said Edwards.

　　Even the other 30 per cent, consisting of local business, has shrunk as people were unwilling to go out during the May Day holiday. So Edwards has had to pay more attention to dealing with his business on the Internet, although he used to have no interest in this area.

　　Due to the declining business, Edwards' staff, like those of many employees in Xintiandi, have much more time to kill during working time. "I am trying hard to keep my staff passionate during the present bad time," he said.

　　Edwards is a comparatively nice boss. In some other Xintiandi businesses, workers simply lost their jobs.

　　Financial loss

　　Xavier and Xintiandi epitomize the city's SARS-scarred commercial face.

　　However Edwards, and other Xintiandi businesses, have agreed to get together and donate a large amount of money to the city's hard-fighting medical staff.

　　As the financial and commercial centre of China, Shanghai is experiencing the largest-ever challenge to its post-reform economy, although the influence has first been reflected on some tertiary industries which provide face-to-face services or gather masses of people.

　　"The industry maintained a rapid growth in April with an increase of 14.6 per cent compared with last year, but travel, transportation, retailing, restaurants and related industries have suffered a serious negative impact," said Zhu Zhaosong, vice director of the city's Development Planning Commission.

　　All these industries contribute 8.5 per cent of the city's total GDP, according to Zhu. But he stressed that the negative impact of SARS on the economy has not yet fully appeared.

　　SARS's negative effects on performing arts businesses in the city have started to surface, with big monetary losses starting to appear.

　　Almost all concerts and performances for the whole month have been cancelled, with the only exception being "Cats", the musical staged in the Grand Theatre.

　　According to Zhang Liqing, vice general manager of CPAA Entertainment (Shanghai), due to audiences returning tickets for performances, the company has lost some 20,000 yuan.

　　The pre-investment required to introduce a programme from abroad cannot make a sufficient return if the programme is cancelled, and this adds another large item to the deficit.

　　Zhang said: "We had planned to stage Riverdance, the famous Irish tap dance show, but SARS destroyed the whole plan. We have already done a lot of promotion - the total loss for introducing Riverdance will amount to over 700,000 yuan (US,300)."

　　The Shanghai Dramatic Arts Centre has cancelled nearly 60 shows due to be staged between April 28 and May 31. The direct financial loss went as high as two million yuan.

　　Although the Shanghai Symphony Orchestra has not been evaluating its financial loss, its marketing manager expected a heavy blow, and the longer the situation lasts, the heavier the loss will become. The Shanghai Spring Music Festival has been put off, and many plans for touring out of Shanghai were cancelled.

　　The Shanghai Symphony has had to decline the contributions from some very supportive overseas musicians who had expressed willingness to come despite the SARS problem.

　　"We have to ensure their safety. We cannot put our visitors at such risk," said the marketing manager, surnamed Chen.

　　SARS has also changed the schedules of many international tours, such as the renowned musical "Cats".

　　As the producer of the "Cats" premiere in China, the Shanghai Grand Theatre has suffered losses of over 1 million yuan (US,000), which has partly resulted from increased operating cost due to performers of the musical who are stranded in the city due to SARS.

　　Travel agencies had a quiet period during the past May Day holiday, usually their best season. The hotel occupancy rate dropped 20 per cent compared with last April, according to official statistics. In the second half of April, the occupancy rate was even lower.

　　Also since April 20, the city's consumption figures have also declined, for the first time in decades.

　　In the long term, the SARS crisis will also have a lagging impact on the city's foreign trade and on attracting foreign investment during the second half of the year.

　　Fifteen years ago, the city lost about 1 billion yuan (US million) because of the city-wide hepatitis A epidemic.

　　In Shanghai, favourable policies will soon be released to help seriously-affected businesses survive the crisis, but Zhu refused to release any details, since "such policies still need to be approved through certain processes."

　　Although suffering from sluggish business, Edwards has signed a donation document together with about 30 Xintiandi tenants several day ago. In total, the Xintiandi //Group// will collect about 1 million yuan to give to medical staff in Shanghai who are fighting the spread of SARS.

　　(Star News)