Shang­hai’s econ­omy look­ing up at last

China Daily (Canada) - - FRONT PAGE - By WANG YING in Shang­hai

wang_y­ing@chi­nadaily.com.cn

The Shang­hai gov­ern­ment has vowed to main­tain its progress in eco­nomic restruc­tur­ing while us­ing in­no­va­tion as its main en­gine for fur­ther de­vel­op­ment, af­ter the city posted pos­i­tive eco­nomic re­sults in the first half of this year.

“We must not lose sight of the prob­lems we are fac­ing and will con­tinue our best ef­forts for the tasks at hand,” Shang­hai Party Chief Han Zheng was quoted say­ing by the Shang­hai Morn­ing Post.

“In or­der to mea­sure the re­sults of our work, num­bers are not enough. We should also pay at­ten­tion to the qual­ity and ac­tual ef­fects, as well as the sat­is­fac­tion lev­els of Shang­hai’s peo­ple,” added Han.

Ac­cord­ing to the Shang­hai Mu­nic­i­pal Sta­tis­tics Bureau, Shang­hai fi­nally raised its gross do­mes­tic prod­uct (GDP) growth to the na­tional level of 7 per­cent in the first half of this year. This re­sult comes af­ter eco­nomic growth had ran be­low the na­tional av­er­age for seven con­sec­u­tive years.

Shang­hai’s GDP ex­panded to 1.19 tril­lion yuan ($191 bil­lion) and the added value of the ter­tiary in­dus­try grew 10.2 per­cent year-on-year, ac­count­ing for 67.1 per­cent of the to­tal GDP. The con­sumer price in­dex moved up 2.4 per­cent, down 0.2 per­cent­age point from a year ago.

“Shang­hai has had to over­come a se­ries of neg­a­tive fac­tors this year, such as the de­cline in com­mer­cial im­ports and ex­ports and a sig­nif­i­cant fall in in­dus­trial growth,” said Tang Hui­hao, the bureau’s chief economist.

“The ma­jor in­di­ca­tors are steadily and grad­u­ally pick­ing up, with con­sumer price grow­ing mildly,” he added.

Sta­tis­tics re­vealed that the city’s State-owned en­ter­prises made con­sid­er­able con­tri­bu­tions to Shang­hai’s eco­nomic growth this year. Ac­cord­ing to the State-owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion of Shang­hai Mu­nic­i­pal Gov­ern­ment, such en­ter­prises recorded 944 bil­lion yuan in rev­enue from Jan­uary to June, and their profit grew 12.4 per­cent year-on-year to 58.8 bil­lion yuan, thanks to eco­nomic restruc­tur­ing and re­form. State-owned com­pa­nies also com­pleted 15 as­set-restruc­tur­ing projects in the first half of 2015 and launched 24 key projects with a to­tal value of 164.7 bil­lion yuan.

The city was a na­tion-wide leader in GDP growth from 1992 to 2007, but it fell be­low the na­tional av­er­age for seven years af­ter the fi­nan­cial cri­sis broke out in 2008 and when it be­gan the process of eco­nomic restruc­tur­ing. When China’s GDP growth slowed to 7.4 per­cent in 2014, Shang­hai’s eco­nomic pace was still 0.4 per­cent­age points lower at 7 per­cent.

“The process of restruc­tur­ing is to put be­hind the old and es­tab­lish the new. It is good to see Shang­hai has now got­ten back on track in a com­par­a­tively short pe­riod of time,” said Sun Li­jian, a pro­fes­sor with Fu­dan Univer­sity, who sug­gested that the city should now di­ver­sify its in­dus­trial struc­ture.

“The prop­erty and fi­nance sec­tors used to be big con­trib­u­tors to the city’s eco­nomic growth, but they are easily in­flu­enced by the eco­nomic cir­cle. In or­der to achieve sta­ble eco­nomic growth, Shang­hai should have med­i­cal care, high­end man­u­fac­tur­ing and life ser­vices play a big­ger role be­cause mar­ket de­mand in these sec­tors are more sta­ble,” said Sun.

Shang­hai’s eco­nomic and so­cial de­vel­op­ment ob­jec­tives for 2015 are to sta­bi­lize eco­nomic growth while restruc­tur­ing it, im­prove the qual­ity and ef­fi­ciency of growth, as well as to keep public rev­enue in pace with eco­nomic growth, the mu­nic­i­pal gov­ern­ment’s an­nual work re­port re­leased ear­lier in Jan­uary stated.

For the first time this year, Shang­hai did not make GDP growth an ob­jec­tive, be­com­ing the first lo­cal gov­ern­ment to do so.

Ac­cord­ing to Liu Shengjun, deputy di­rec­tor of the Chi­naEurope In­ter­na­tional Busi­ness School in the Lu­ji­azui In­ter­na­tional Fi­nance Re­search Cen­ter, the city’s pos­i­tive eco­nomic re­sults may have sig­naled the end of the tough times.

“Shang­hai has passed its most dif­fi­cult time in the tran­si­tion from tra­di­tional man­u­fac­tur­ing to ad­vanced man­u­fac­tur­ing and mod­ern ser­vice sec­tors,” Liu said.

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