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China Daily Website

Shanghai's economy showing signs of stability

Updated: 2012-08-15 17:31
( Xinhua)

SHANGHAI -- Shanghai is witnessing a slow rebound with second quarter economic growth at 7.4 percent, compared to the first quarter's 7 percent.

During the first half of this year, China's financial powerhouse has been promoting the economic restructuring. The added value to the property market has been reduced by 1.6 percent from the same period last year, while the tertiary industry has seen its added value grow by 10.3 percent year-on-year.

The tertiary industry now takes up 60.4 percent of Shanghai's GDP, and the local government said the city will focus on developing the high-end services including finance and shipping during the second half of this year.

The world's metropolises generally have a service sector that takes up more than 70 percent of the total GDP, and the gap between Shanghai and other large cities in the world will provide impetus to the city's development, said Yan Jun, chief economist of Shanghai Statistics Bureau.

Similar with the rest of the country, Shanghai's manufacturing industry has been witnessing a recession. During the first half of 2012, the production value of the city's electronic information manufacturing industry has decreased by 6 percent year-on-year.

However, the high-tech industries such as the designing and production of integrated circuit has seen booming.

Shanghai RDA Microelectronics, a semiconductor company, is expecting to see its revenue reach $350 million this year, a growth of more than 20 percent year-on-year, according to Dong Li, CFO of the company.

He said: "With the advantage of the country's industrial chain of integrated circuit and the upgrading of the consumer electronics, the microchip companies have a lot of space to grow, and we have decided to expand the company from the current 350 people to about 500 people."

Yan Jun said, driven by the development of the service sector and the new industries, combining with the low rate of last year's economic growth, Shanghai is hopeful to continue with a slow economic rebound during the second half of this year.

Xiao Lin, vice director of Shanghai Development and Reform Commission, said although China's economy will still be squeezed by a dwindling overseas market demand during the second half of this year, the domestic demand will provide a driving force.

Xiao said that Shanghai's urban per capita income during the first half of this year has grown by 12.5 percent year-on-year, faster than the economic growth of 7.2 percent even after eliminating the price element.

Under this situation, the growth of consumption of Shanghai during the first half of the year has been reduced, which means that the consumption environment in the city still needs to be improved, Xiao said.

Although the local government said that the city should not rely on putting money into development, it is still attaching great importance to the investment in the sectors related to residents' livelihood and industrial upgrading, such as education and company technical reform.

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