HONG KONG: By hitting the one region of the world with a high level of economic and trade growth, severe acute respiratory syndrome has underlined the extreme vulnerability of the global economy to unexpected shocks.

How bad is the situation and what can be done?

First, it is worth recognizing that until SARS the Chinese economy was overheating and showing some real estate bubbles. The economic impact has so far been mostly localized and on specific industries such travel and entertainment. But it may be spreading to consumption generally and from there to export trade.

For East Asia as a whole, much depends in the short term on whether the disease peaks out soon - as it has done in Hong Kong and Vietnam - or spreads to Korea and Japan. Another critical factor is whether other states will follow Taiwan, which has shot itself in the foot, in economic terms, by imposing draconian and ill-informed quarantine restrictions on visitors from its main trading partners, China and Hong Kong.

The likelihood is that the disease will continue to spread geographically but its incidence and virulence settle down to that of previously known forms of viral pneumonia. Even in Hong Kong, the worst hit location, incidence to date is just 0.02 percent of the population, with a mortality rate in line with other pneumonias.

More dangerous for the world at large is overreaction to a disease that has so far killed no more people than the average commercial airplane crash, is insignificant compared with scourges such as malaria, and probably no more dangerous than viruses such as dengue and West Nile. It must be tackled firmly but calmly.

The potential for rapid spread of disease in an interconnected world underlines the need for international cooperation and more spending on public health. But it also emphasizes the need for measured responses and official actions driven by reason, not emotion.

Cover-ups are dangerous and counterproductive, as China has found to its cost. But it is equally irresponsible to enhance hysteria by reacting to sensationalist reporting rather than by dispassionate assessment of risk. Many restrictions announced to "control" SARS have no basis in advice from disease control authorities.

Misguided and excessive reaction to post-Sept. 11 terrorist threats has already done huge damage to cherished freedoms and old friendships. Now it seems overreaction to SARS could do the same to trade, tourism and cross-border investment as pundits rush to proclaim that, after all, China is no place for healthy investment.

Some of the worst culprits are multinational companies and international agencies that ought instead to be setting an example, accepting that the global integration they extol sometimes has a downside.

In practice, SARS and similar health scares could generate new forms of discrimination against developing countries, as have the labor rights and environmental issues raised by Western protectionists in the name of progress.

President Jacques Chirac, who will host Group of Eight leaders in Evian in June, wants the summit meeting to avoid Iraq and concentrate on development issues. That focus must now include looking at what can be done to prevent fears of disease adding to global economic woes, and harming developing countries in particular.

It should also be an occasion for the developed world to recognize that its own economies are bound to grow slowly. The United States is saddled with debt and Europe and Japan have appalling demographics. Their best hope is to help ensure that developing countries become the primary engine of global growth. A good start would be to take a more measured view of SARS and pledge not to impose undue trade and travel restrictions on dubious health grounds.