Fears over rapid Shanghai growth
Shanghai said yesterday that its economy roared ahead in the first half of this year, growing by 12.6 per cent year on year - exceeding the national growth rate by nearly two percentage points, and raising concerns about overheating.
The Shanghai Statistical Bureau said spending on infrastructure ahead of the World Expo, which the city will host in 2010, supported the economy, along with exports, and it described the growth rate as 'relatively rapid' though 'healthy'.
'The central government will continue economic tightening in the second half,' predicted Sun Lijian , an economics professor at Fudan University. 'Shanghai is still depending too much on exports because of a lack of domestic demand.'
Shanghai's investment in property development increased a mere 0.4 per cent to around 58 billion yuan in the first half of this year, the bureau said. Housing prices fell 5.2 per cent in the first half from the same period last year.
The National Bureau of Statistics announced on Tuesday that the mainland's gross domestic product surged 10.9 per cent year on year in the first half of the year and grew by 11.3 per cent year on year in the second quarter, the fastest rate in more than a decade.
Shanghai had forecast GDP growth of 10 per cent or more for all of this year. In the first quarter of this year, Shanghai recorded GDP growth of more than 12 per cent.
The latest round of growth figures reported by local governments could encourage the central government to crack down on property speculation and spending, which are helping to spur the economy.
Shanghai's fixed-asset investment, a key measure of state spending, rose 9.5 per cent to around 176 billion yuan in the first half, helped by spending on infrastructure that surged by 25.5 per cent, the Shanghai bureau said.
The city's exports rose nearly 25 per cent to around US$53 billion in the first half, outpacing imports which rose nearly 18 per cent to about US$52 billion, it said.
Products manufactured by foreign companies in Shanghai account for the bulk of the city's exports. But foreign investment growth slowed in the first half compared with all of last year.
Shanghai's actual foreign investment rose only 3.5 per cent to around US$4 billion in the first half, while contracted investment rose just 1.7 per cent to US$7.2 billion. Last year, actual foreign investment rose 4.7 per cent to US$6.9 billion while contacted investment surged 18.3 per cent to US$13.8 billion.
Additional reporting by Lillian Yang