Sars fails to deter overseas interest in the city, but unemployment is rising Unshaken by the Sars outbreak, foreign investors committed US$6.07 billion in funds to Shanghai in the first half of this year, up 40 per cent on last year. In June, contracted foreign investment - an indicator of future trends - rose 24.8 per cent to US$909 million, local media said yesterday. Figures for actual foreign investment, an indicator of the funds utilised, were not given. Shanghai approved 2,468 projects with foreign investment in the first six months of this year, a rise of 85 per cent from last year. Previously, some economists expressed concern the Sars outbreak would cripple foreign investment, since overseas companies were prevented from sending executives to the mainland. Shanghai approved 201 large projects with foreign investment of more than US$10 million each in the first six months of the year, accounting for about US$4.2 billion of total contracted investment. Last month the city gave the go-ahead to 28 projects worth more than US$10 million, accounting for US$544 million of investment. They included a massive investment by Taiwan's Honson Tech Semiconductor. Consultants said foreign firms had started to revive plans put on hold because of Sars. By the end of last month, Shanghai had drawn more than US$69 billion in cumulative contracted foreign investment in more than 30,000 projects. Foreign investors have been pouring funds into Shanghai ever since the mainland's entry to the World Trade Organisation. Meanwhile, Shanghai's city government said the city aimed to create at least 400,000 jobs this year to counter rising unemployment caused by Sars and a flood of new graduates. At the end of last month, Shanghai had 294,000 registered urban unemployed, up 6,200 from the same time last year, official figures showed. Foreign analysts said the unemployment figures underestimated the true number of jobless because they did not include rural unemployed and workers laid off by state companies. Shanghai's urban registered unemployment rate was 4.85 per cent at the end of last month, and the city aims to keep it within 5 per cent this year. Closures and layoffs in the tourism, transport and restaurant sectors because of Sars were factors in the rising employment rate. In addition, nearly half of those completing vocational programmes were still jobless at the end of last month, though 81 per cent of undergraduates finishing university had found jobs. As one way of creating jobs, the city is experimenting with allowing employees to buy stakes in their companies to encourage the growth of private business.