Shanghai logs slow half-year growth of 5.6pc
Shanghai, normally the mainland's economic locomotive, posted its slowest growth for the first half of a year since 1992 as it bore the brunt of the global recession and languished behind the national recovery.
The city reported that gross domestic product grew just 5.6 per cent in the first six months, 1.5 percentage points lower than the national figure, as the export-oriented manufacturing sector was hit hard by shrinking external demand.
The mainland's commercial capital recorded the lowest first-half GDP of the more than 20 provincial areas for which public data is available so far.
'It is now awfully difficult to meet the whole-year growth target,' said Cai Xuchu, the chief economist with the Shanghai Statistics Bureau, addressing a press conference yesterday.
'Shanghai is now focusing on the quality of the economy rather than the pure growth rate,' Mr Cai said.
His pessimistic forecast was in stark contrast to Beijing's upbeat mood on the national economy, which has been stoked by a massive four trillion yuan (HK$4.54 trillion) stimulus package and is poised to meet the government's 8 per cent full-year growth target.
It was also a rare admission by a senior official who bluntly acknowledged the city's economic growth had stumbled in the global downturn.
Shanghai Communist Party boss Yu Zhengsheng said last week that the city's economy in the second quarter had witnessed a turnaround although it was still not on a solid footing.
Shanghai's woeful performance also fuelled suspicions about the national recovery as analysts cast doubt on the investment-driven growth.
'In terms of an absolute figure, Shanghai's GDP wouldn't largely affect the national total,' said Shi Lei, an economist at Fudan University.
'However, as a mainland gateway to the world, the city's bad economic figure will ripple across the nation.'
In the past two decades, Shanghai pioneered the nation's economic growth as the mainland integrated into the global economy. However, the coastal city fell victim to dwindling external demand last year as exports plummeted.
Shanghai's outbound shipments in the first six months declined 22.2 per cent from a year earlier to US$62.5 billion.
Industrial output was valued at 276 billion yuan, down 3.6 per cent year on year.
As Shanghai lost its lustre as a leading engine for the mainland economy, the inland provinces were reaping huge benefits from Beijing's cash handouts on infrastructure projects.
Sichuan province, hit by a devastating earthquake in May last year, was among the fastest-growing areas with a 13.5 per cent rise in GDP for the first half.
Beijing attempted to maintain a rapidly growing economy with the multitrillion yuan stimulus package, intended also to narrow the income gap between the affluent eastern coast and the inland regions.
Savvy analysts cast doubt on the investment spree, contending it would not be enough to ensure sustainable growth in the long term.
Mr Shi said it would be at least five years before Shanghai and other wealthier eastern provinces, which were the top beneficiaries of the nation's soaring exports and lavish foreign investments in the past decade, get back on the fast track.
Dongguan, a boomtown in Guangdong province, posted a scant 0.6 per cent GDP growth in the first half as global financial woes took their toll on local businesses.
Zhejiang province, one of the richest areas in China, reported that its economy grew 6.3 per cent in the same period, 0.8 percentage point off the national pace.
Downturn bites
Shanghai focusing on quality of the economy rather than growth rate
City's industrial output was valued at 276 billion yuan, a year-on-year drop of: 3.6%
