The national economy has recently shown positive signs despite the continuing global financial turmoil. But the economy in Shanghai, the country's biggest metropolis, is still flailing.

In the January-February period this year, Shanghai's industrial output was 292.174 yuan, down 12.7 percent year-on-year, according to the municipal statistical bureau.

The bureau said Shanghai's industrial added value for the period also fell, 12.4 percent from a year earlier to 68.04 billion yuan.

China's average growth rate of value-added industrial output increased 3.8 percent over the same period.

"This is maybe the first time in 10 years that such an important development statistic was remarkably lower for the country's economic powerhouse, Shanghai, than it was for the country as a whole or for other major cities," said Yang Jianwen, vice director of the Institute of National Economy at the Shanghai Academy of Social Sciences, in the 21st Century Business Herald.

Shanghai's GDP growth dropped to 9.7 percent year on year, the first time it fell below 10 percent in the last 17 years and 28 of Shanghai's 34 major industries recorded declines in industrial output over January and February.

Yang said the deteriorating economic situation in southeastern Guangdong province may have overshadowed Shanghai's remarkable slump but that Shanghai's slide was actually more dramatic.

In the first two months of this year, Guangdong province's value-added industrial output went up 0.8 percent. Other coastal areas also saw increased output; Jiangsu province's value-added industrial output grew 8 percent and Shandong province's grew 5.8 percent (Zhejiang province's, however, also dropped, by 8.2 percent).

"I think Shanghai's plummeting economic situation is not due wholly to the global financial crisis," Yang said, adding that the lack of innovation in Shanghai's industrial structure was the main reason for the city's flagging output.

(China Daily 04/13/2009 page5)