Treaty of Nanking

Shanghai growth may be lowest in almost 20 years

PUBLISHED : Thursday, 12 January, 2012, 12:00am
UPDATED : Thursday, 12 January, 2012, 12:00am


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Shanghai's economic growth slowed to around 8 per cent last year, the municipality's mayor said yesterday, down from double-digit growth in 2010 and potentially the lowest figure in almost 20 years.

Delivering his annual report at the opening of the Shanghai people's congress, Han Zheng described the slower growth as 'stable and healthy', and said the drop was partly due to less activity in the property sector.

Inflation in the city ran at 5.2 per cent last year, up from 3.1 per cent the year before, but the mayor said this was 'slower than the national rate', without revealing the national figure, which is due to be released next week.

Although Han did not give a specific figure for economic growth - saying merely that it was estimated to be 'above 8 per cent' - if it falls from the 8.3 per cent estimate for the first three quarters of the year, it could be the lowest in 19 years.

Shanghai's economic output grew by 10.3 per cent in 2010, according to the city's statistics bureau.

It has enjoyed double-digit growth almost every year since 1992, aside from 2008 (9.7 per cent) and 2009 (8.2 per cent) when it was feeling the impact of the global financial crisis.

Han promised that he would 'deepen reform' of the city's residence permit system to make it easier for qualified migrants to switch to a local hukou under a points scheme introduced last year.

He also said the city would take steps to support foreign entrepreneurs as part of its efforts to boost the city's attractiveness to 'high-level overseas talent', but did not give details.

Han hailed the fall in property prices as evidence of the city's 'resolute implementation of the national policy of regulating the property market', and showed it had 'completed the objective of controlling the price of new homes throughout the whole year'.

He said the city would start construction of 11 million square metres of public housing this year, adding to 17 million square metres started last year.

Han also pledged to accelerate construction of the city's Disneyland theme park, but did not provide details. Work started on the long-awaited 390-hectare park and resort in April last year, and the 29 billion yuan (HK$35.67 billion) project is expected to be completed in 2016.

Mark Williams, chief China economist for Capital Economics, said he did not see the slowing of the city's economic growth as a cause for concern. 'Eight per cent growth is still pretty good.'