Shanghai's contracted foreign investment rose 18.3 per cent year on year to US$13.83 billion in 2005, a six-year high, local media reported yesterday. The increase for 2004 was 12.6 per cent, according to official figures. Contracted foreign investment indicates future investment flow. Overseas companies have been flocking to Shanghai, using the city as a base to enter the mainland market. 'Shanghai has really evolved as the control centre to what is one of the critical markets for global companies,' said Jeffrey Bernstein, chairman of the American Chamber of Commerce in Shanghai and managing director of Emerge Logistics (Shanghai). Reports gave no figures for actual foreign direct investment in 2005. But foreign investment rose 6.2 per cent in the first 11 months of last year to US$6.6 billion. The growth rate marked a slowdown from 11.8 per cent for all of 2004, according to the Shanghai Foreign Economic and Trade Commission. Some foreign companies, especially manufacturers and smaller firms, say they are looking beyond Shanghai to mainland cities with lower costs. Speaking in an annual New Year address, Shanghai Mayor Han Zheng said the city recorded 'healthy, steady' economic growth in 2005, but gave no figure. Shanghai is widely expected to register double-digit growth. Mr Han said key goals for this year included continuing to build Shanghai into an economic, financial, trade and shipping centre. He also called for the city to increase its ability to compete for investment internationally and strive for more sustainable economic growth. Government investment was one of the main engines of the economy in 2005. Shanghai spent more than 60 billion yuan on large projects last year, finishing the first phase of a new deepwater port, its fourth metro line and fifth underwater traffic tunnel. Exports have been another main growth engine. Shanghai's total foreign trade volume was valued at US$200 billion last year, up more than 10 per cent from 2004. City officials have called for domestic consumption to play a bigger role in the local economy this year, in line with national policy. Local economists suggested ways to improve the city's quality of economic growth in a series of essays published in the Liberation Daily yesterday. Fudan University economics professor Hua Min said Shanghai had to keep the cost of doing business there competitive. The deputy head of the Shanghai Academy of Social Sciences, Huang Renwei, said the city should encourage the service sector to play a larger role in the economy. Shanghai leaders have already announced intentions to encourage services, as well as research and development. Meanwhile, Shanghai officials claimed yesterday the city had become the world's biggest port in terms of tonnage, overtaking Singapore by handling 443 million tonnes of cargo last year. The city was third in terms of twenty-foot equivalent units with 18.1 million TEUs. The city's airports handled 2.2 million tonnes of cargo, up 13.9 per cent from 2004. More than 41 million passengers passed through the Hongqiao and Pudong airports in 2005, up 15.3 per cent.