Shanghai lowers growth aims as demand weakens
Shanghai's economy will continue to slow this year as the municipality targets 8 per cent growth amid weaker external demand and continued curbs on the property sector.
The city's gross domestic product (GDP) expanded 8.2 per cent last year, one of the slowest-growing provincial-level regions in the nation, Shanghai's statistics bureau said.
The figure beat mayor Han Zheng's estimate of 8 per cent last week, but it was one percentage point lower than the growth in the mainland's overall GDP.
It was also the fourth consecutive year that Shanghai failed to achieve double-digit economic growth.
'There is much uncertainty in 2012,' Shanghai statistics bureau chief economist Yan Jun said. 'Shanghai aims to embark on innovations to adjust the economic structure.'
Shanghai posted more than 10 per cent year-on-year growth in economic output between 1992 and 2007, buoyed by surging exports and increasing foreign direct investment.
But the city has felt the pinch from the global slowdown since 2008, and officials are shifting their focus to the service sector from manufacturing.
Last year, industrial output grew 6.5 per cent to 796 billion yuan (HK$980 billion) while service sectors generated added-value of 1.11 trillion yuan, up 9.5 per cent from 2010.
Shanghai is striving to become a global financial centre, but the efforts haven't paid off over the past two years, largely the result of battered global markets.
The State Council is taking a cautious stance on drastic liberalisation in financial markets, preventing Shanghai from strengthening its financial muscle. At the same time, Beijing has put on hold a plan to launch an international board at the Shanghai Stock Exchange, where foreign corporate giants could list yuan-denominated A shares.
The city will also maintain curbs on the property sector, which used to be a key growth engine for the city's economy.
In 2011, the contribution from the property sector to the city's economy dropped 0.5 percentage points to 5.3 per cent. Shanghai officials, including the mayor, said slower growth didn't necessarily mean that the local economy was in trouble.
Shanghai reported a trade deficit of US$17.9 billion last year, but Yan said that was not a negative because the city was importing equipment to help generate future growth.
In 2011, 21.2 per cent of Shanghai's major manufacturing firms reported losses, the statistics bureau said, compared to 17 per cent in the previous year.