(FORTUNE Magazine) – SARS can't kill China's boom, says Yao Jingyuan of the State Statistical Bureau. Why? Because Marx says so. "We read in Das Kapital," he lectured the press at an April 17 briefing, that "investors are not even afraid of being hanged or beheaded" as long as profit margins are high enough.

Well, it wouldn't be the first time Marx got it wrong. The speed with which severe acute respiratory syndrome is spreading through China is giving even the most intrepid investors pause. Any number of highly plausible developments--SARS-induced plant closures, sickened expat managers languishing in China's wretched hospitals, an implosion in consumer confidence--threaten to shatter bullish China sentiment in a hurry. In a hint of things to come, U.S.-based software maker Sybase Inc. has temporarily shut its offices in China, citing SARS as the reason. And AIG, the insurance giant, is blaming SARS for lower China revenues.

Through late April, though, the China market had maintained enough of its allure that there was no rush for the door. "I don't know of anyone who's getting out," says Andrew Young of Hill & Associates, a consulting firm. At Motorola, one of China's largest U.S. companies, with 12,000 workers, the SARS outbreak has had "absolutely no impact whatsoever" on investment plans, says spokeswoman Mary Lamb. At GM's $1.3 billion auto plant in Shanghai, "it's business as usual," says spokeswoman Daphne Zheng. Wal-Mart says it is not reconsidering relationships with China suppliers.

But confidence is eroding. The government's belated mid-April confession that the virus had infected not dozens but hundreds of people in Beijing has rattled foreigners. Shortly after Beijing's admission, J.P. Morgan Chase economist Joan Zheng sliced her 2003 China growth estimate by 0.6 of a percentage point to 7.4%. That figure assumed an end to the crisis by June.

The Yue Yuen footwear factory in Dongguan, not far from Hong Kong, shows why a quick and tidy end is far from certain. Up to 16 laborers live in a single small room, sharing a wash basin and toilet. If SARS emerges in that kind of environment, it will be hard to stop. Zhou Xia, a 23-year-old worker who rooms with 11 others, is not concerned. "If I catch it, it's just fate," she says between slurps of her bowl of noodles. One of Dongguan's Japanese plants has ordered workers to remain inside the factory gates for all but a few hours a week.

How foreigners react to SARS is important because of their substantial role in the economy. Foreign investors put $52 billion into China last year--about 5% of GDP. That could slump to $30 billion if companies rattled by SARS decide to shift some production to countries such as Indonesia or the Philippines. SARS has already damaged tourism, which accounts for 2% of the economy. And lately the big worry is that SARS will batter consumer confidence as it has in Hong Kong, where retail sales have fallen 50%. That would hurt Asia and, in turn, the rest of the world. Like SARS, economic sickness travels fast. --Clay Chandler