Shanghai's economy sound, says Mayor Han
Bill Savadove in Shanghai
Shanghai Mayor Han Zheng yesterday gave a positive reading of the city's economy to foreign business leaders, despite the global economic crisis and expectations that the mainland's commercial capital could be hit hard in the coming months.
Shanghai's economy grew 10.1 per cent in the first nine months of the year, the mayor said.
The city has not announced a change to its forecast for full-year growth of around 10 per cent.
'We have confidence in maintaining the momentum of Shanghai's stable, sustainable economic and social development,' he said.
However, Mr Han admitted that Shanghai would not be entirely insulated from the economic meltdown, saying there were early signs of a slowdown in the third quarter.
The city is highly dependent on exports and financial services.
'Shanghai is more connected and accessible to the global economy and therefore it is exposed to the dramatic changes of the external economic landscape,' he said.
'It is inevitable that the global financial crisis will have an impact on China and Shanghai.'
Growth of 10.3 per cent was recorded in the first half of this year and 13.3 per cent for last year.
Shanghai has recorded double-digit economic growth for the past 16 years.
The city has already moved to prop up its property market with lower down payments and mortgage rates for first-time buyers.
'We are going to further continue the growth of the property market and ensure it continues to grow in a sustainable and healthy manner,' Mr Han said, adding that more low-cost housing would be provided for families in need.
He vowed to push ahead with economic reforms and building Shanghai into a centre for finance, trade and shipping, although these areas were among the most vulnerable to the crisis.
'We must press ahead with reform and opening up and reshape our system in line with the needs of a modern, market-based economy,' he said.
Business leaders said the mainland would be affected, especially in its exports. 'The slowing of the global economy will impact the export businesses in China,' said Samuel DiPiazza, chief executive of PricewaterhouseCoopers International. 'But China, and Shanghai in particular, have some advantages in this global recession that we're facing.'
These included strong financial institutions, domestic demand and vast foreign currency reserves.
Maurice Greenberg, chairman of investment holding company C.V. Starr & Co, said Beijing might want to delay some economic reforms amid the turmoil, such as moving to a fully convertible currency. 'It's time to be a little more cautious ... rather than seeing this as the moment to be a global financial centre,' he said.