Ter­tiary sec­tor growth gives the right im­pe­tus for Shang­hai’s eco­nomic fu­ture

China Daily (Canada) - - BUSINESS - By YU RAN in Shang­hai yu­ran@chi­nadaily.com.cn

De­spite Shang­hai’s over­all eco­nomic slow­down, the city’s ser­vices in­dus­try man­aged to achieve an an­nual growth of 10.6 per­cent in 2015, ac­cord­ing to the lat­est of­fi­cial data.

The city’s to­tal out­put value ex­ceeded 2.49 tril­lion yuan ($380 bil­lion), with a year-on-year growth of 6.9 per­cent, 0.1 per­cent higher than fig­ures in the first three quar­ters and 0.1 per­cent lower com­pared to the pre­vi­ous year, ac­cord­ing to a re­port re­leased by Shang­haiMu­nic­i­pal Sta­tis­tics Bureau.

In par­tic­u­lar, the ter­tiary in­dus­try ex­pe­ri­enced growth of 10.6 per­cent with a to­tal value-added out­put of 1.69 tril­lion yuan, ac­count­ing for 67.8 per­cent of the city’s to­tal out­put value, up 3 per­cent­age points yearon-year.

“The rapid growth of the ter­tiary in­dus­try is a ma­jor driver of the city’s eco­nomic growth, which is mov­ing ahead grad­u­ally along with the more in-depth struc­tural trans­for­ma­tion of the city,” said TangHui­hao, the bureau’s chief econ­o­mist.

Re­forms tak­ing in the China (Shang­hai) Pi­lot Free Trade Zone have also had a cer­tain ef­fect, as the sta­tis­tics showed.

A se­ries of mea­sures and poli­cies have been re­leased in the FTZ, which has at­tracted for­eign di­rect in­vest­ment ac­count­ing for 67 per­cent of the city’s to­tal — $58.9 bil­lion, a year-on-year surge of 86.5 per­cent. Con­tracts in the ser­vice sec­tor in the zone last year were worth $54.5 bil­lion, a yearly jump of 95.7 per­cent.

“The on­go­ing open­ing of var­i­ous ser­vices ac­tiv­i­ties in the zone high­lights the ris­ing im­por­tance of the ser­vices sec­tor in the city’s econ­omy,” said Xu Bin, a pro­fes­sor of eco­nom­ics and fi­nance atChina Europe In­ter­na­tional Busi­ness School.

Fur­ther­more, the to­tal amount of ren­minbi set­tle­ments on cross-bor­der trans­ac­tions in­creased three­fold on a yearly ba­sis. The vol­ume of di­rect over­seas in­vest­ment also rose 2.8 times.

About 45 multi­na­tional com­pa­nies launched their re­gional head­quar­ters in the city in 2015.

Inthe mean­time, build­ing a sci­en­tific and tech­no­log­i­cal in­no­va­tion hub has been a ma­jor fo­cus of the city since early 2015. Cur­rently, the num­ber of multi­na­tional cor­po­ra­tions’ re­search and de­vel­op­ment cen­ters in Shang­hai ac­counts for nearly a quar­ter of the to­tal num­ber in the coun­try.

The pro­por­tion

of

Shang­hai’s in­vest­ment in re­search and de­vel­op­ment in its GDP has also risen from 3.6 per­cent in 2014 to the cur­rent 3.7 per­cent, reach­ing the level of de­vel­oped economies.

“Con­struc­tion of a tech­no­log­i­cal in­no­va­tion cen­ter will en­hance the city with faster growth, which is al­ready on the way to es­tab­lish­ing an in­ter­na­tional eco­nomic cen­ter, a fi­nan­cial cen­ter, a trade cen­ter and a ship­ping cen­ter,” said Yu Lei, a re­searcher with the Shang­hai Academy of So­cial Sci­ences.

The sta­tis­tics also pointed to the wors­en­ing sit­u­a­tion of in­dus­trial en­ter­prises in the city. The val­ueadded in­dus­trial out­put of large en­ter­prises with an an­nual turnover of at least 20 mil­lion yuan ex­ceeded 3.1 tril­lion yuan, a 0.8 per­cent de­cline from a year ago. The to­tal value of ex­ported goods was more than 756 bil­lion yuan, down 1.6 per­cent year-on-year.

Over­all, Shang­hai is in the process of up­grad­ing its in­dus­trial struc­ture to achieve sta­ble eco­nomic growth in the next year.

“Eco­nomic de­vel­op­ment is ex­pected to re­sult in a grad­ual growth of 6.5 to 7 per­cent in 2016, with more work tak­ing place on trans­form­ing the city into a sci­en­tific and tech­no­log­i­cal hub with global in­flu­ence,” said Tang.

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